The housing crisis ignited a chain reaction of events that resulted in the U.S. economy cascading to the worst contraction since the Great Depression. In response, not only has the Federal Government proposed and implemented various legislation, but the financial industry has also joined in the effort to find a solution. However, large-scale mortgage restructurings already show signs of failing. These results should not be surprising, because general loan modifications suffer from the problems that created the housing crisis. Namely, mortgage originators did not examine whether the borrower could afford the monthly payments.

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