I wrote loans and mortgages for one of Canada's largest banks before I went into car sales so I don't need the level of condesention that you seem to think is required. My family dinners are alive with discusions on this kind of subject with my Aunt manageing commercial lending for the province for one FI and my mom running loss prevention and repos for the province for another FI. Trust me, they don't want your property, they want some money. My mom won't sign the final papers on a home repo unless the client is more then 2 years in arrears with no sign of new money comming in. They are re-writeing mortgages that were done as 20 year amortizations out to 40-45 years to make the payments keep comming.Again I have to step in to say something that I don't want to say, but it's the truth: A lot of the payments that banks collect don't belong to the bank per se but by a private investor. The bank makes money by servicing the loan.
You have got to understand that financial entities don't see property as the buyers see it. If people are making payments on time, it's an assist, and profit making, if payments are not being made in a timely manner the loan is discribed as non-performing, and a liability. Liabilities, are written off and liquidated. Making arrangements increases the servicing costs, meaning more people have to be hired to accomplish it, and it just results in more losses.
Banks outside of the ones owned by the FDIC, would rather wholesale the house to an auctioneer than negotiate with you. People having problems with payment don't negotiate successfully unless there is a sudden influx of cash. These are the realities of life. I understand that the concepts are difficult to accept, that's why only a few people are Bankers and Accountants.