Wow. When we bought our house just a few short years ago, we were amazed at how easy it was! No credit, but so what- that high interest rate that you provided could be refinanced when we established more credit- you explained well that kids in their 20's would have no problem GAINING credit when we were homeowners.

You were right- in fact, our first credit card was issued by you! That was thoughtful, because you probably understood that 20-somethings would want lots of new home furnishings- we were so proud of our home. When the other cards came, it was a bit hard to resist- yes, we were tight, but so what? Our house was increasing in value...and the decision to bundle all those cards into a simple equity line of credit made perfect sense! And, we didn't even have to cut up the cards!

By the time we realized that the market had turned for the worse, it never occurred to either of us that this might impact our jobs- what does the housing market have to do with employment? Good thing we kept those cards to get us through, after I lost my job unexpectedly!

 Oh, well- at least our lender is offering  a loan modification program. We've trashed our credit- those cards just kept getting rate increases, and when it came to making our mortgage payment vs. paying off the cards, well...what other choice is there, but to let them go for a period of time?

"Hello? Loan mod person? We can't make our payments, but understand that you might be able to help."

"What? Why do you need our total debt? We're not paying the debt, because we're trying to keep the house!"

"No, I'm not sure that a one month respite is going to do it- you see, my job was taken from me due to layoffs, and while I've finally found another, it's going to take at least three months to get the back payments caught up, as well as catching up my credit cards. What? There's a Making Home Affordable Program? Let me check with them- thank you!"

"Hello, Loan mod person? The Making Home Affordable program tells me that we have too much debt to qualify for their program, so it's just you and me!"

"No, we haven't tried to sell the house. You see, our wrecked credit is going to make it very difficult to find a rental, and besides- rents are not much lower than our payment (were our payment reflective of the value that the house is worth now). Aren't loan modifications available to reduce the principle and refinance based on value? I've been talking to people, and doing some reading...and we love our house."

"Oh, I see. So what you do is let us skip one payment, then divide it up into 12 months of HIGHER payments. Hmmm. I'm not sure that this is going to help us get back on our feet- what happened to all the money that I read about that was set aside to assist homeowners with true hardship?"

"Ok, so this is all that you're willing to do, even after I've explained that three months is the time I'll need to figure our way out of this mess...yes, I know we created it...yes, I know we should have refinanced when we could...yes, I know we should have cut up our cards after we paid them off...yes, I know we should have been more educated...but NO, I don't think that your "modification" plan will work for us." Click.

"Honey? I've been thinking. If it takes a year for them to take the house back, why don't we just save the money that we're not spending on a house payment, bank it, and then at least we'll be able to provide an up front amount of rent for a landlord that will likely require us to jump through hoops in order to rent from them...cash speaks loudly...and since this is all our fault, we need to be prepared for the consequences."

"What, honey? Pursue other avenues? I'm so depressed at this point that I'm DONE dealing with our lender- or anyone else- let's just live here until they kick us out."*

*fictional young characters/lender