- 1). Communicate with your loan servicer about options for improving the status of your underwater mortgage. Ask your mortgage company about options that could reduce or get rid of your negative equity, such as a loan modification to reduce your principal balance.
- 2). Advertise the sale of your home with the assistance of a real estate agent who specializes in selling distressed properties. Ask your mortgage servicer if a buyer can purchase your home for less than the amount owed via a short sale.
- 3). Speak with a counselor who is recommended by the U.S. Department of Housing and Urban Development (HUD) about alternatives you may qualify for, such as certain neighborhood programs or assistance from the government. A list of approved counselors is available on HUD's website.
- 4). Explore your options with an attorney who can advise you on the legality of walking away from an underwater mortgage, as well as bankruptcy plans that may reduce or eliminate your mortgage debt.
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