It's no secret to most people that the majority of homeowners are unable to get their mortgages modified and eventually lose their homes. And, in fact, even those who do get modifications, end up with a monthly payment that is HIGHER than the original. That's why you hear about so many modifications that still end with the homeowner losing the home.

Now there's new reporting about why those modifications aren't happening. There has been plenty of speculation, but now there are some facts to look at.

Baseline Scenario, in my mind the best blog out there on the economic turmoil we've been experiencing, has a new post talking about what's actually been happening.

Loans are not being modified because there is a financial incentive in many cases, to NOT modify them. Until that changes and the job market improves, it's hard to see how the foreclosures stop.

That said, the picture here looks rosier than the one depicted in the chart shown in the blog post on Baseline Scenario. Remember that all real estate is local!

So, how do we change the financial incentives for the services and mortgage companies?