patrick.net

I'm betting many of these loans are multi pronged. I haven't read too much into them, because I'm really not worried about home owners who take this path getting a great deal. I know the banks have been around (hundreds of years in some cases) and will still be around long after everyone here is dead. They're good at what they do.

I'm betting they're reducing the loans just enough to free up a bit of cash so the home owner fees "rich" again. They're dropping just everything just enough to prevent strategic defaulters, and probably a few non strategic defaulters from walking away. They're probably extending these mortgages WAY out there to do this. The home owner will be poorer in the long run from this.

Of course if they were stupid enough to get involved in this, after 30 more years, they'll own a property and hopefully be less likely to drain on society later on in life, when they realize saving $100/year for retirement doesn't work, and that their $3000 in savings isn't going to carry them through retirement :)