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Mortgage Principal Reduction: Why "Re-Equifying" Borrowers Could Exacerbate The Mortgage Mess

Many critics of the Obama administration's mortgage loan-modification program say it won't work because it doesn't do enough to address "negative equity," the plight of people who owe more on their home loans than the current value of those properties. Without equity in their homes, these critics say, borrowers have little incentive to keep paying and are apt to walk away as soon as things get tough, if not before.

 

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