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"Tampa foreclosure attorney Mark Stopa says it's rare to have loan modifications. He says the way the system is set up, banks have no incentive to modify a homeowners loan.
Stopa says that's because the government pays the banks back for foreclosures, plus back money owed.

He says smaller banks are more likely to modify loans because they don't get the insurance from the government."

I assume this is an example of a Fannie/Freddie loan guarantee. Banks completely protected, screw the homeowner.

She's not underwater, didn't max out her equity but all the Fed mortgage assistance programs are nothing but show if the banks can just foreclose and collect any losses from the gubmint without lifting a finger and as in this case pick up the lady's equity as a bonus. Solid plan. For the banksters. Sheesh.

Like Reagan said “....government IS the problem.”

Starts off with promoting home buying, allowing (and almost forcing) banks to give mortgages to high-risk people, and giving the banks incentive to do so. Then, when the mortgages don’t get paid, the gov’t comes to the rescue of the banks (too big to fail) with a rescue plan.

Of course if the gov’t would just Leave It ALL Alone things would have worked out for the better. Except for the part where the gov’t gains more power over the banks, the home owner and the taxpayer with each new “rescue” plan.

These are not misguided or failed policies - they are ALL part of the plan.