Mortgage lenders and servicers need to face the facts: You lent out too much money and you will never, ever be repaid. You need to get serious about loan modifications, so you, the homeowners and the rest of the economy can move on.
I assume the banks do know who to lend money to but they also know the government rule changes and it still remains fact that back before the recession hit, politicians (Mr. Frank, Mr. Dodd) were making laws to fit home ownership in a way that anyone who wanted one should get one. It didn't matter that one might not be able to afford it. Though this was not the complete cause of the financial meltdown, many saw this as an opportunity to own a house or apartment building simply because they could. Thirty five years ago when we also thought the American dream included home ownership, my husband and I had to put 20% down and we had to prove we were able to pay the monthly payment by proof of employment. Of course the country had good paying jobs back then. You can modify all the loans you want to but that will not change the fact some will still be walking away from the 'American Dream' of home ownership along with the 'chicken in every pot.'