If a borrower has lots of other debt besides the underwater mortgage, bankruptcy may be the way to go. Otherwise a SHORT SALE is the solution. While neither remedy is pretty, a short sale is less damaging as the borrower can qualify for a new FHA loan in 2 years.
Having said that I always recommend that the borrower seek legal and tax counsel first and then decide on the course of action.
So to answer your question, how can you win when you are loosing? You can win by following the best solution under the circumstance and get on with life. Focus on the new start, learn from the experience and know that poverty in this country is not a career but a temporary state. Tomorrow is a new day!
Lending institutions do not make money on interest they make money on fees, they liked people that were in default until the market started to decline making loan values higher than market values, which in turn weekend the economy causing unemployment, more foreclousre, more declines and where does it stop?
Buy a home after foreclosure, short sale, deed-in-lieu-of or bankruptcy expert
Tolerance is not a choice it should be mandated.. When a borrower lost their job the last thing they need is a notice of foreclosure.
A legislative emergency moratorium should be introduced with heavy penalties to institutions that push that critical envelope of foreclosure on the unemployed. When this government talks of compassion the irony is that they have exercised just that with a majority democratic support. The problem it was not in support of the little guy but saving the banks from bankruptcy.
Before I sound one sided . Please note that I abhor and object for forgiveness or the reduction of debt. That matter should not provide a free pass for anyone. It should be treated by the courts as a responsibility that the borrower should be held liable and their earnings to be garnished for as long as it takes to pay it back. I have provided a solution for that mater as well. I believe that under the circumstances a faire way to accomplish the need of the borrower and the institutions is by relieving the the borrower from paying interest on the debt for a agreed time. With no debt reduction the institutions come out smelling like a rose. With the saving of interest on the mortgage the borrower can rapidly pay down debt and save substantially and still maintain the property and their self esteem. Now that is not compassion but faire play.
Buy a home after foreclousre expert