Loan modifications aren't just important to the revival of the U.S. mortgage market. The U.K. too recognizes the importance of keeping borrowers in their homes and has devised several initiatives to push loan modifications through, although with less success.

"The U.K. isn't thinking about loan modifications on the same level because it doesn't have to," Culhane said. "Part of the problem behind why more servicers just don't take the initiative and start doing loan mods is the lack of protection for servicers, which leaves these companies vulnerable to a bondholder backlash, especially in the case of loans that have been packaged in securitizations."

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