Many people got sucked into the real estate bubble. They bit off more than they could chew or in this case afford. Some people researched the move up and simply refinanced to get at the cash. The recession has made it difficult for a lot of people to make their payments. If that were not enough, home prices fell and nobody could sell high enough to pay off their loans. Is there a way out?
Banks have started modifying home loans that meet certain criteria. They do have pretty strict guidelines as to what is acceptable. If you can make your house payments, they wont change your loan terms. Home prices have fallen but that is not proof that they should lower your payments. Remember, you requested the loan, you told them you would make the payments. You have to have a reason for not being able to make the payments. Are you getting paid less than when you took the loan? Was there a physical reason why you could not work? Any of these is an acceptable reason for the bank to lower your payments.
There are lots of acceptable reasons if you know how to present them. The list may not make sense to you but it might to a banker. This is the reason why you absolutely must educate yourself on loan modifications.
Banks will often reduce the payments for up to 5 years so the borrower can get and stay up to date. They will often turn this into a permanent reduction so they wont have to worry about missed payments later.
Be careful, your home is your largest asset. If you own a home, its probably worth at least a quarter million dollars. Make sure you do not make a mistake.
You should take an inexpensive course on loan modifications. The more you understand the loan modification process, the more likely it will be that you will save your home. If you do not know what you are doing, you might as well send the keys in and save yourself some time.