Determining the Severity

• You first need to take stock of your current mortgage. While it may not be considered a "toxic" mortgage by the US Treasury or Wall Street standards, it's toxic if it's slowly debilitating your ability to flex your financial muscle. For example, a mortgage payment that accounts for more than 50% of your monthly salary is a toxic mortgage---it does not let you properly save for the future. In general, if you're struggling to make payments on your mortgage, and, even worse, you are worried about your mortgage interest rate adjusting even higher, you need help with a toxic mortgage.
  
  

Hardship Program

• The first step you need to take is in the direction of your lender. Despite what may have happened at closing (many borrowers with "toxic" mortgages complained of being duped when they took their loans), you're currently stuck with the loan. Contact your original loan officer and ask for a hardship program. These are usually short-term, temporary solutions that drop your payment and interest rate. This will give you a window of time to look for options to either refinance or sell the property.
  
  

Homeowner Affordability and Stability Program

• President Barack Obama signed the Homeowner Affordability and Stability Program bill into law in February 2009. This law is targeted to help roughly 9 million Americans retain their homes by avoiding foreclosure. You must qualify for this program. Some eligibility requirements include: having made on-time payments on your current mortgage, and not being underwater on your home (owing more than the home is worth). Each case is reviewed on a case-by-case basis so it's in your interest to apply for the program (contact your original lender), regardless of the restrictions---there are always one-offs and exceptions.