Assuming that you want to stay in your home, the simplest and least expensive thing to do is to renegotiate the loan with your lender to a fixed, lower interest rate without refinancing and all of its fees. Very simple. If the lender does not want to negotiate, you may want to move … there are much cheaper homes available, some in your own neighborhood, and they're probably not be laden with so much debt.

Assuming that you don't want to stay in your home, the best options are probably short-selling or walking away.

I'm sure there are other methods of reducing your debts, but these come to mind most quickly.

To anyone underwater and considering walking away from their house – PLEASE DO! The government's (and taxpayer's) role is NOT to subsidize YOUR losses. Get over it, stop whining and move on. Walk away from your house if you want – the market will hit a natural equilibrium faster that way and houses will once again become affordable.

Although it's somewhat painful it seems we want it both ways. Home prices to stabilize (stop going down) and Americans to be better prepped for retirement. It would seem that in macro more affordable housing (allowing home prices to keep reducing) would allow for a better cost of living and many American's to spend income on something other than house payments and property tax.

I'm not sure why this is not mentioned more other than it does not benefit anyone who makes a living off real eatate transactions.

In my business, we are already seeing signs of a pulback. My web site, http://www,gorllamedicalsales.com , which privides a job board for medical device sales reps to find new jobs, most of the companies have adopted a wait-and-see position towards filling vacant jobs until the specter of the Obama healthcare plan is defined.

Home ownership has been a way of building wealth, but in an indirect way through which you saved some of what you spent. We all need a place to live, and if you were going to spend money on that to begin with, might as well get something for it was the line realtors used. With prices historically increasing homes became defacto piggy banks, and when it came time to retire most people had real value in their home (in fact for many it was, and still may be (just worth a whole lot less) their biggest asset).

But, considering real estate taxes and maintenance, at best, home ownership is a goofy "investment", and in most cases, it isn't an investment at all in the sense that the money you are putting into it will increase in value. Rather, the real "investment" in home ownership is "how much of what you spent are you going to be able to get back?", and today the answer is pitifully little. (Sure, there are some exceptions perhaps, but those are largely for the benefit of speculators and not something ordinary homeowners can participate in). Realtors can peddle their lies about "tax advantages" all they want(since when is paying the bank $1.00 and saving .28 in taxes a smart move?) and they can try to peddle more of their lies regarding home "appreciation", the fact of the matter is that it really is not true for most people.

Consider that real estate taxes make the idea of home "ownership" a misnomer to begin with. Because of those taxes you never really own any land, unless you are tax exempt like the church or the government. Now, we and many others are seeing real estate taxes increase (despite the plummeting value of underlying property). The various government entities at the real estate tax feeding trough still need the money they have become accustomed to spending, and even more is being piled onto the real estate owners back because tax revenue from other sources is decreasing. Even without that phenonemon, those same taxes contribute to undermining home "ownership" real rate of return.

What I think the current financial mess is illustrating (and I am afraid that this is the new reality and it is not going to change going forward) is that home ownership as a way of building for the future is largely an idiot's game.

Our home was appraised at $650,000 in 2002 (our last refinance). The home was purchased as new constuction in 1994 for $250,000, plus the cost of the land ($78,500). The house is now said to be worth $380,000 according to Zillow.com. After 15 years of having "owned" (there is no more mortgage) a new construction house we have negative equity after taking into account acquisition cost and the hard money that has since gone into the house in terms of landscaping and other capital improvements. That statement is even more true when you consider that the hard dollars actually paid were worth more then than they are today. If you add real estate taxes during that period (roughly $120,000 over the fifteen years, and currently $11,500 a year – on a house worth $380,000), you would have to be an idiot to think that today, a home could possibly be an "investment".

The sad part is that a home isn't even a round about way of "saving" money anymore. That is to say, in addition to a significant part of our net worth just have disappeared during the real estate/financial crises, it is not going to come back – ever. Sure, our "value" might go up in raw dollars – but with all the money the government is spending, those inflated "increased" dollars are going to be worth a whole lot less, and we will never again see even the hard dollars put into the house. We would have more had we simply put the money spent into a mattress. My advice to anyone even thinking about buying a home today is don't. Rent (it is much much cheaper over the long run) and you get the privilege of walking away from it when it goes to hell in a handbasket.

Sure there were also other facets of the industry that aided in channeling the funds to the housing industry but only one entity has the power to create enough money by keeping interest rates low enough to fuel the engine and keep it running long enough to create an explosive economic meltdown just like when your car engine is pegged at 7K rpm's, eventually the engine seizes and the party is over.

CNN can take down all my comments it likes, it doesn't change the facts & the more people educate themselves and ask critical thinking questions like what the role of government & money ought to be in a free society, nothing will change.

Nikki, this program was never meant to help the worst off, it was designed to act as a firebreak between people who were hopelessly underwater and the people who were teetering on the edge.

By attempting to quickly refi the people who were in danger of becoming too far behind the curve, it was hoped that as the market continued to soften, the government could continue to put people who crossed the line into the new program.

People who are already at 150% of value are going to make their payments or lose their houses. If the government stepped in and refi'd or guaranteed all of these loans for say, two years, we'd be in the same boat again in two years. The difference would be that many individuals who now had extra room every month would simply spend the money on consumer products, and not plow it back into the house, because the house is still at risk.

Please tell me where in the constitution it says that the government is responsible for your home price or bailing you out from a stupid purchase?