Loan modifications, foreclosures, short sales, the mortgage industry has some problems to solve. One option for the home owners is principal reduction. Their current mortgage is paid and the new note amount will be aprox. 75% of their current home value.
If they owe $500k but the current value is only $400, they will have a new debt of only $300k aprox. at 6.25% fixed for 5 years.
If the property is upside down, you owe more of the house value, you can qualify for this program.
More information here
