U.S. Effort to Modify Mortgages Falters

http://online.wsj.com/article/SB124873920406585271.html#mod=testMod

Please permit me to sound like a broken record:

In the vast majority of situations, loan modification will not result in a better financial outcome for the holder of the risk, whether that be a bank in its loan portfolio or an investor in a securitized pool. Therefore, unless or until servicers are “forced” to modify loans (and are secured against modification related litigation) and investors are forced to take losses, there will be no real foreclosure relief.

This is the elephant in the room, and no one in banking or government seems willing to step up to the plate and admit it.