The debate is out there on why it is acceptable for the bank to modify one person’s loan and not everyones.  You are essentially rewarding people for bad behavior.  Basically saying, dont follow your word—it is ok, we will take care of it and modify your mortgage. 

The problem is that those home sellers who are willing to play by the rules feel that they are being punished.  The buyers who did sign up for the same mortgage and are struggling to make those payments. They are living on a shoe string budget and are working hard to make their payments. While their neighbors sit in front of their big screen becasue they asked for a modification. But for what reason?  They could take the easy route and ask the mortgage company to “change” their agreement. 

The counter argument is that they are protecting the people who are able to make their own payments by keeping the foreclosure rates down in their neighborhoods and communities.  So the argument is which way is right?  There is no right or wrong answer, it just depends on which end of the spectrum you are on.

 What are your thoughts?