[econjack]

...the move would protect borrowers against default if they had lower monthly payments.

Or, maybe they should look for a less expensive house that they can afford.

[lepton]

Going from 30 years to 40 years is pretty disastrous in terms of creating equity.

Per hundred thousand, at current 7%:
You go from a $665.30 monthly payment to $621.43, so $44 less per month, and 528 less per year.

However, with the 40 year mortgage at 30 years you would still owe more than half, at $53,521, and you will have already paid 177k in interest on your way to 198k, instead of the 140k for the 30-year loan.