Do you think the banks did the right thing not modifying the mortgage?

Do you think the banks did the right thing not modifying the mortgage?
The homeowners signed a contract with the bank. Doesn’t that mean anything?
Of the people Walking Away, 1 in 5 could pay their mortgage.
Regarding the bankruptcy law: is seven (7) years enough time for this type of bankruptcy to stay on your record?
Should the consequences be more, the same, less, or something different?