I am a little concerned over the advice Maria gave below with regards to contacting more than one lender for a loan modification. I was under the impression that you have to contact your lender directly and ask for their:
a. The Lost Mitigation Department
b. Loan Modifications
c. Home Retention Department, Counselor
Different banks call it different things.
I am also concerned about how you know your home has lost that much value since when you purchased the home. (My best guess would be that you went on to zillow or something like that which is highly inaccurate) If you spoke to an agent and they gave you a better idea of what your home is worth, then that would be a more accurate reflection of your market value.
Next, the most important thing for you to do as you negotiate with the bank is to be prepared for the documents the bank will require you to mail or fax in as well to be prepared for a phone interview.
Here's what you will need to have:
1. Hardship letter
2. Two most recent bank statements and paystubs
3. W2 or 1099s from 2010, 2009, 2008, possibly 07 (if you are self-employed, then a P and L).
4. List of household expenses
It's not an easy process. I have negotiated directly with more than one lender for clients in the past. What matters most is whether or not the bank believes you can make reduced payments and if your ratios put you with the guidelines for a modification.
Also, this excel file will help you get organized a personal budget: http://njretoday.com/?attachment_id=764
The bank you currently have your mortgage with is your best bet but feel free to call me at 908-415-3958 if you are having a hard time getting answers.
1. leave everything as it is, rates are not going up
2. refinance if your house is worth more than the amount owed
3. pay more down to reduce the amount you need to mortgage
4. find out how to short sale your house - you need to be behind on payments and have a hardship other than being upside down
5. sell it