If the CFPB thought that mandating a 43 percent debt-to-income ratio requirement for a residential mortgage, as seen in its ability-to-repay rule, would lower the odds of a borrower later going into default, it might want to think again. The JPMorgan Chase Institute recently reviewed more than 400,000 mortgage modifications that received payment reduction, principal reduction, or a combination of the two during the financial crisis, and came to the conclusion that payment reduction did a better job bringing relief to struggling homeowners than principal reduction. “Our data showed that for borrowers who were underwater, payment-focused mortgage debt reduction was more effective at slowing default than principal-focused mortgage debt reduction,” the institute said in a report last week. “In addition, ...