While I applaud the sound advice and feedback you've received from several of my fellow RE professionals I will have to chime in with a stark reality. There are folks living in their homes not having made a payment since 2007. It's not unusual in California at all.
In many instances the banks would rather see someone still occupying a home vs having to deal with an empty or abandoned home that can be easily vandalized, or left sitting empty if not being used to cook Meth or cultivate pot.
I actually know a developer who has been living in a 5 million dollar (10 mil prior to the bubble burst) 10,000sf home on a 10 acre parcel in Rancho Santa Fe and has never made one payment on it to this day. How you say? He planted grapevines and landscaped so beautifully that the bank concluded it would be better to have him stay on the property as a custodian and maintain the property as opposed to having it sit empty and end up losing millions of dollars for lack of maintenance in the process.
This is one case where the banks didn't actually walk all over their own lips. Not suggesting its right but what else are you going to do?