Has your friend contacted their lender to discuss loan modification? I know that most lenders are about 60 days behind in that dept but it's well worth a call. The interest rate and/or principal can be lowered in order to make the payment much more affordable. If your friend's lender isn't willing to cooperate, there's government help as well................ http://.www.hopenow.org.
If that fails, the next step would be a short sale. Your friend would be able to stay in the home while it was for sale. Depending on who purchases it, your friend may be able to stay and rent the property back. Some of my investors are highly interested in that situation.
Please let me know if there's any questions you have or need some more info. Have a great day!
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