Much of the revamping will start occurring once investors sell off or write down the value of the loans to account for decreases in home prices and the delinquent status of the loans, said Stan Ross, chairman of the Lusk Center for Real Estate at the University of Southern California. Some borrowers may find that they can stay in their homes if the value is written down enough.
“You mark the asset down to current value,” Mr. Ross said, “then you look at the borrower and say, ‘Is this the borrower that will repay me?’ ”
But housing counselors and lawyers who have worked on behalf of borrowers say their experience suggests that is not yet happening.