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Reductions in principal, on mortgages that now dwarf the home’s value, are nearly unheard of, even among the most willing firms. Just 2 percent of modifications — or less than 1 percent of all loan “workouts” — resulted in a reduction in principal, according to a monthly state survey of a dozen California lenders and servicers that agreed to join a state program to streamline their processes.
“It comes down to common sense. They start doing principal reductions for people that deserve it, everybody and their mothers will come for one,” said Moe Bedard, who launched loansafe.org, where borrowers share their miseries and tips on breaking through the barriers with lenders.
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