Problem there, Rich, is that most of the mortgages were sold and bundled and converted into securities. They are now owned by investors (pension funds, fannie, freddie, etc.). The lender(s) don’t own the mortgages & notes any longer so how can they grant a principal reduction? It would mean taking a huge loss (not for the banks) but for those that participated in the securitization. I don’t know of any law than can do that except maybe an executive order from the President. Don’t count on the court system to salvage any of this – it’s as corrupt, bought and paid for by the same banking institutions who paid through campaign contributions to get them there. Do remember who is contributing to the campaign for those running for (and already in) the presidency! My personal opinion is to shut down the Fed Reserve Bank, seize all of it’s members assets and then distribute them to homeowner’s as a pay-out to the investors in these securitizations thereby reducing the principal balance on the loans secured…but doubtful that will ever happen.