+1000 on the *Brake Modulators* being the source of your problem.

They were specifically designed to reduce/eliminate the chance of "locking up" the wheels on low end *path rider* type bikes (by this I mean generally low speed, very casual, following the kids on their Barney and/or My Little Pony bikes).
I recall many discussions in the past on these forums about poor brake performance due to modulators installed on the braking system.
I would attempt to remove the modulators if possible. Just be aware that you will need to be cautious/smart when you apply the brakes until you get used to the much improved performance.