There's an unfamiliar trend emerging in America's troubled housing market. Big banks are volunteering to lose money — hundreds of millions for themselves and investors — in order to save homes at risk of foreclosure. And they're doing it in record numbers.
The year closed with a new trend: In 30 percent of private loan modifications, banks are doing a principal writedown — that is, hacking away at the amount owed as far down as the current market value. They're doing it so borrowers can actually afford payments. Two years ago, that 30 percent was just at 2 percent.
