Another reason to doubt mortgage modification: It will wreck your credit score

For some time now, I -- and others here at WalletPop -- have argued that the Obama administration's mortgage modification plan has largely been a dismal flop, with many distressed homeowners unable to get even a temporary three month modification, let along the desired permanent fix that would keep them in their homes.

I have repeatedly argued here and elsewhere that just lowering a home-owner's interest rates a few months would do little good and maybe even do harm. The only real solution would be a change in the bankruptcy laws to allow judges the flexibility to actually lower the loan's principal. Banks objected. The President first seemed to back that fix but then apparently caved to lobbyists. Congress this month ended up nixing a measure that would have changed the law.