[LHarveyMadman]

I'm surprised that this hasn't come up earlier. It was bound to happen - the investors are guaranteed to earn less money (you'll note that I didn't say that they'd "lose money") if they modify all the loans in the portfolio. But they were going to earn less money with foreclosure of underwater loans, anyway, so there seems to be a disconnect in their logic.

Principal write-downs, for certain, would cause to lose money. That's one reason why these have been hard to come by.

By the way....just earlier this week I discovered that I'm an investor too....one of the funds in my 201(k) is invested in a couple REITs. I looked up the performance of one the underlying securities, and it pays decent dividends, though the share price has suffered. I don't know what to think. It clearly benefits me to some degree by helping to support the value of my 201(k). I guess that makes me part of the problem too.