It sounds like they have a legitimate hardship. My experience with all of the modifications and programs is that they are going to hurt their credit. Since it is not with Freddie/Fannie some programs will not work for them. The safest way to do it is for them to apply directly with their bank with the assistance of the government counselors at http://makinghomeaffordable.gov/ It is a long road to travel and none of the options are pleasant. The banks may not cooperate, but they will not know until they try. If they have large assets that they are unwilling to tap for various reasons be careful what they give the bank. Any information that they provide to the bank can and will be used against them in the future to collect on a deficiency. Depending on how far upside down they are and the assets that they have, a strategic default may be in their best interest rather than a short sale. Definitely recommend legal counsel in every situation. Oliver Frescona has experience in these deals.