As home prices slide and loan defaults pile up, some mortgage companies are slashing the amount that borrowers owe, deciding that a permanent cut in the loan balance may pay off if that helps teetering borrowers avoid foreclosure.

The small but growing push sharply contrasts with most loan-modification programs. Borrowers often get a lower interest rate or years longer to pay off their mortgage. But such changes may not be enough to make the loan payment affordable and don’t fix the problem of borrowers owing more than their home is worth.

Reducing the principal on mortgages is “a last resort,” said Paul Koches, executive vice president at Ocwen Financial Corp., a West Palm Beach, Fla., loan servicer that has shrunk the amount owed on 10,884 delinquent mortgages as of Sept. 30. That is 23 percent of all the loans modified by Ocwen so far this year.

On average, such borrowers saw their loan payments drop by 20 percent to 40 percent, typically by lowering the loan balance and interest rate. Ocwen estimates that the savings for investors who own the mortgages vary from a nominal amount to more than $325,000 per loan compared with the likely return if the loans wound up in foreclosure.

Many mortgage lenders and servicers have been reluctant to drastically change loan terms, in part because of worries that would antagonize investors who own securities tied to the loans.

Mortgage servicers are responsible for collecting mortgage payments and working with troubled borrowers.

Not everyone agrees thatreducing the loan balance is the right move.

JPMorgan Chase & Co.’s new effort to restructure as much as $70 billion in mortgage loans doesn’t include principal write-downs.

Instead, JPMorgan will sometimes base new loan payments on a smaller loan balance, while requiring that the full loan amount be repaid when the borrower refinances or sells the home. This approach lets the bank benefit from any subsequent increase in home values, a spokesman said.

But as foreclosures mount and the economy worsens, there is “a begrudging acceptance ... that this is the way things have to move,” said Sharon Greenberg, a mortgage strategist with Barclays Capital, a unit of Barclays PLC.

Ocwen estimates the company’s foreclosures result in an average loss of $122,000, or 59 percent of the loan amount. The figure has more than doubled since last year, causing Ocwen to look harder at lowering principal payments.

Early trends are encouraging. A recent study by Credit Suisse found that roughly 12 percent of Ocwen borrowers who had their loan balances reduced in April were at least 60 days past due five months later. In comparison, the default rate on less-aggressive loan modifications was 22 percent or more.

Though more data are needed, Ocwen’s results “show that principal modifications are worth another look,” said Rod Dubitsky, head of asset-backed securities research at Credit Suisse. “There are still some lingering concerns, but in six months what Ocwen is doing could become standard operating procedure.” Loan-principal reductions might be more effective than other strategies partly because borrowers are likely to work harder to stay current on their loans if they aren’t underwater, he added.

Ocwen is the nation’s sixth-largest subprime-mortgage servicer, according to Inside Mortgage Finance, with about $45 billion of mortgages under management.

Some investors remain skeptical of Ocwen’s approach because they fear that the write-downs have been driven by Ocwen’s own financial needs rather than investors’ best interests. Write-downs can help Ocwen reduce its cash outlays on loans it services. Financing these outlays, known as advances, has become more costly and more difficult as credit markets have tightened.

“To the extent that we can reduce delinquencies and achieve positive results for investors and homeowners alike, that also redounds to the benefit of the servicer,” Koches said.

The long-term impact of erasing principal from mortgages will depend on borrowers such as Bruce Moreau, of Merrimack, N.H. Moreau was five months behind on his mortgage payments when Ocwen canceled a planned foreclosure and agreed to modify his loan. In January, the company reduced Moreau’s loan balance by $47,000, to $177,000, and converted his 8.65 percent adjustable-rate mortgage to a fixed-rate loan with the same interest rate. The new arrangement cut Moreau’s payments by more than $800, to roughly $1,830.

Moreau, a laborer for the New Hampshire Highway Department, made the next several payments on time but slipped behind again in October because his pay was barely enough to cover his expenses. “I am looking forward to the winter because we have a lot of overtime,” he said.