Rewriting a mortgage into conventional terms will only help a small number of borrowers. Those who lied about income to get loans on properties they could never have afforded otherwise are beyond help.
Personally, I think there are a lot more of the latter (the liars), than the former (the honest). So I HOPE the lenders who wrote those loans throw more good money after bad; it will hasten their own demise and flush them from the market for good.