Obviously illegal and will be struck down in court. Heres the issue- Bankers created the housing collapse, as far as the homes value is concerned. By allowing

Obviously illegal and will be struck down in court. Heres the issue- Bankers created the housing collapse, as far as the homes value is concerned. By allowing many 'liar loans' that started defaulting, we exploded with foreclosures which flooded supply without demand. As a result, home prices went down. It does not change the fact that a percentage of the people getting hurt by foreclosures are those who lied in the first place. Yes, your home value went down. Provided they were in a 30 year fixed (the vast majority were, since they were being resold to fannie/freddie) your payments did not go down, OR up. If you could afford it on day one, you should still be able to today. Basically, this is comprised of many people who lied to get their mortgage and as a result, their home values went down (but their payment is the same as day one) but since their homes are down in value they stop paying. The bank should have never loaned these people the money in the first place. You should have never been in this house if you are getting foreclosed on now. *this comment is not applicable to all situations, but a common occurrence.