Banks and financial institutions that hold bad mortgages are not negotiating. They say they are, but they are not. Until they do, the foreclosure problem will only get worse. The main problem is that these banks and institutions are most likely insolvent and can't negotiate. Perhaps they need an incentive, one might be to offer then a double deduction on the principal that they agree to write down with borrowers. In addition, allow them to take those deductions and losses against previous profits in the past four years and as far forward as they need. Its not perfect, but the fact remains that until principal write downs happen, the foreclosure crisis will continue.
Scott Dauenhauer CFP, MSFP, AIF