Banks are really working with people. I have seen banks offer lower interest rates, for set periods of time. They are getting pressures from the government. There are alot of NON-PROFITS who will help you. The other side of that is that they usually work with people who have been late on a payment, but if you can get past the morons at the entry level. I think you can do it yourself. I hate to see people mess up their credit. If you plan on staying in your property for a while it will turn around. Call your bank see what you can arrange. If they wont work on something for you. Call a professional.

the good news
renting is cheaper
the bad news
you're credit is not going to be good for a long time
sounds like you bought at the peak of the bubble
they say 8.3 million people will be "under water" this year

John, I understand where you are coming from. But, there is a lot at stake. Since no one - and I mean NO ONE knows how this market is going to play out, it would be a great panic for everyone to just walk away from their home.

One option to consider would be a short refi; also, if Stephanie walks away from the home what kind of tax consequences will she have? What tax benefit will she have if she becomes a renter?

She has done great to make all her payments on time which helps her credit score. If she walks away from this home she will ruin her credit that she has worked hard to keep.

Question to Realtors™. Is paying the note on a property that's $100K upside-down kind of like renting, i.e. throwing money away?

I would imagine that when you’re paying a mortgage and not building equity, you really start to see housing for what it really is – a consumption-good.

My advice: secure a rental to live in and then walk away.

Stephanie, congrats that you have been able to make all your payments on time. I think the bank was being helpful in their re-negotiation. I would also try to get the property taxes reduced.

I know there is a company that has had great success in renegotiating loans for people. They charge $495. If you want their info, please email me and I will send it to you,

Id walk. If you are 100k under value with values still dropping I would probably suggest a short sale

Stefanie,
It sounds like your lender is working with you to make things okay. Because the real estate market is a cycle, it normally will go back up. At least that what history has shown us. If you are interested in something different than what the lender offered you, you should definitely communicate with them. I wish you all the best.