...not really, but some are seeming to pitch it that way.
CNBC headline: "Many Borrowers Re-Default After Mortgage Is Modified"
The problem here is that many of the decision-makers continue to ignore the fact that the current crisis is one of excess credit rather than insufficient credit. That is to say, there is too much credit in the system when compared to the assets that back the credit and the ability to repay that credit.
Simply rejiggering these loans to make them somewhat less onerous doesn't address that underlying problem. At best, it delays it. To truly reach a solution, we have to understand the reality that many of these loans should not have been written in the first place.
Tweaking, er, I mean "modifying", them in increments will not ultimately stabilize them. Instead, they have to go away (aka default) in order to bring the amount of credit back into line with the assets backing it.
Until this is understood, the crisis will continue to linger on...