Client was accidentally foreclosed on and now gets a 40 year loan. Legit?

[Jacob Pereira]

Keep in mind that this is second hand, so some of the details might be off, but here's my understanding of the situation. One of my client's loans was sold to another provider, who didn't do a good job reaching out to her, so she never knew that her provider changed and she continued to pay the original provider. After about 6 months, she started getting calls from all the investors who try to buy foreclosures, so she reached out and realized that her loan had been sold. Once she spoke to the new company, they mentioned that her loan had been in default and because of that they offered her an option to reset the loan into a 40-year at the same rate (3.4%) which would cut her payment by around $500 a month. She's 67, so she's unlikely to reach the end of this loan, but she also had 24 years left on her original, so she's unlikely to finish that one either. Is this legitimate? If so, shouldn't all investors do this?