Any Mortgage/Foreclosure gurus?

Seabee, sorry to hear that you are stuck between a rock and a hard place. The only two courses you have seems to be either a short sale or foreclosure in order to get out of the mortgage. The only other way would be the re-fi under the newest Obama rules. That would lower your monthly payment but it extends the loan out further.

My sister has been a loan officer for Wells Fargo for over 25 years. The banks did not create the mess that we are in. Congress, wanted to get more "underpriveliged" families into homes during the Clinton years. They used pressure tactics in the forms of tax penalties and increased the fed loan rates on banks and lending institutions that didn't help the "underpriveliged" get into homes. They used Freddie Mac and Fannie Mae to guarantee the loans if the banks lifted the 20% down requirements to avoid the penalties. So the banks went along because now they were having to compete with start-up lending companies such as Countrywide. When things went belly up, the Obama administration used bailout money as a way to take partial control of the banks. Any bank taking bailout money had to take on bad loans of defunct lending institutions. For example, BofA was forced to take Countrywides bad loans if BofA wanted to stay in business. Chase was forced to take Washington Mutual's bad loans, and so on. Wells Fargo took the money and returned it the next day after learning that they would be under control of the Obama administration. Obama Re-fi Plan #1 didn't stop the upside down foreclosures so Obama Re-fi Plan #2 was instituted. My friend took Plan #1 and got his mortgage payment reduced and the loan extended and he was able to stay in the house. He became livid when Obama Plan #2 came out and he couldn't take advantage of that because it didn't allow anyone to use Plan #2 if they used Plan #1. Meanwhile, Feddie Mac and Fannie Mae didn't have enough cash to guarantee all of the loans that they said that they would. Guess who was left holding the bad loans? The banks. Guess who gets penalized? The public.

Just remember, it was Congress in the 1990's that created the home market boom and bust. It was Congress and the Obama administration that has us in the situation that we are in today.