See the listing for more photos and details. See some images of this stunner. Guess those gorgeous coastline panoramas don't run as high as they used to. Check out the stunning views. The home offers 3. Pictured here is the home's great room, perfect for family gatherings or large-scale entertaining. See some of the other rooms in this mansion.

Glimpse the many other highlights of this beauty. Features include a pool, guesthouse, tennis court, Japanese garden and three gated entrances.

Do Banks Make Money on Foreclosures? | eHow

Check out these lavish amenities by viewing the listing. Exposed beams and glass doors, leading to a porch with coastal views, add luster to this ornate interior. Corona Del Mar, Calif. Walls of glass give the panoramas full advantage while three stories of outdoor living go even further to celebrate the residence's stunning location.

But as exceptional as this property is, the owner may have asked a little too much at first -- or more than just a little: See what else this coastal mansion has to offer. The home doesn't let you forget its heavenly surroundings. See other ways it reminds you. Take in the views by at the listing. Game and exercise rooms make it ideal for family reunions. Learn more by viewing the listing. Throw in the car garages, and you've got to wonder: Was the original owner playing sultan?

If so, the act's up -- this home has been foreclosed on. See some of the crazy amenities in this mega-mansion. The home boasts high-tech security and sound equipment along with a seat mahogany theater, solar-heated pool and solar-electric generator.

There are also two swimming pools, including the one pictured at left. But that's just the half of it. See some other stunning features of the estate. See the listing for more details. And it's now on sale: Sign up for Finance Report by AOL and get everything from celebrity homes to renovation tricks delivered directly to your inbox daily! Subscribe to our other newsletters. Sign up for Finance Report by AOL and get everything from breaking finance news to money-saving tricks delivered directly to your inbox daily!

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MONEY Magazine: Foreclosures: Bargain hunters beware! - Feb. 16,

For the answer, we turned to Jack Guttentag, the Mortgage Professor and Inman columnist. Guttentag believes that lenders have been too stingy when it comes to reducing loan balances.

Private lenders have offered loan reductions only sparingly, he says, and Fannie Mae and Freddie Mac not at all. Here's the professor's take on why homeowners can't catch a break on loan reductions. The buck stops there.

The decisions to reduce principal loan amounts are made by the firms that service mortgages -- the same folks who brought the country the robo-signing scandal. As servicing firms, anything they decide must be in the financial interest of their client -- that's your lender, not you. If they depart from customary practice -- and writing down loan balances is a departure from customary practice -- the buck stops with them, Guttentag says.

In other words, who's going to take the risk of reducing Joe Homeowner's loan amount and then have to explain it to the boss? To take Nancy Reagan out of context: They just say no.

Banks are in the business of making money. No lender is going to write down the balance of a loan in default just because you owe more than the home is worth. Truth is, there is no benefit to the lender to helping Joe Homeowner keep his house instead of selling it to the next guy.

Do Banks Make More on Foreclosures or Short Sales?

Plus, to help Joe would eliminate the possibility that the bank could also get a deficiency judgment against him. Banks are in this for the squeeze and think of Joe as just the orange.

Nothing personal, of course. In this economy, you will likely default anyway. Sure, you want to believe that the economy is going to turn around and the value of your home will again rise to what you paid for it. After all, hasn't listening to a fairy tale been a surefire way to fall asleep? From the lender's standpoint, the only reason to write down a loan balance is that it will reduce the chance that you will default.

And evidence has shown that people who are heavily underwater -- that's deep in negative equity territory -- are more likely to default than those who aren't. Truth is, negative equity discourages people from making their mortgage payments. Why keep throwing good money after bad?

Banks are short-staffed and the staff they do have is untrained. Most interactions between mortgage borrowers and servicers are handled by computers or relatively unskilled employees, says Guttentag. Borrowers in serious trouble are referred to a smaller number of more skilled and specialized employees, but until you enter the red zone, you are likely to encounter frustration.

Guttentag says that at the onset of the mortgage crisis, servicers were caught short-handed and the sheer volume of foreclosures in the pipeline hasn't allowed them to catch their breath. Mortgage insurance works against you. When mortgages carrying mortgage insurance go to foreclosure, banks are protected up to the maximum coverage of the policy, which generally is enough to cover all or most of the loss.

This discourages modifications, says Guttentag. Even if the insurance coverage falls short of the foreclosure cost, the shortfall has to exceed the modification cost before modification becomes financially more attractive.

So there you have it. A five-point plan for keeping homeowners on the hook for that hefty loan balance.

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