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HERE ARE SOME OPTIONS, SOME OF WHICH YOU HAVE DISMISSED OR WILL DISMISS QUICKLY

One possible option is HAMP

If you not only have an underwater mortgage but also have missed payments, you may qualify for HAMP, the federal Home Affordable Modification Program, available through mortgage lenders.
To qualify, you must demonstrate financial hardship that puts your mortgage in imminent danger of default. The mortgage must be owned by Fannie Mae or Freddie Mac or by others signed up with the U.S. Treasury to qualify for HAMP. (Call your loan servicer to find out if it is participating.)
While the program provides government incentives of up to $1,500 to lenders to process these modifications, the ultimate approval rests with the lender.

OTHERS

1. Stay
If your house still serves as shelter and you can still afford it, there's no particular reason that you can't just go on living in it, pretty much without regard to its value versus what you owe on the mortgage.
This may be the most expensive option: You can't take advantage of the cost savings of moving to a cheaper place, plus you're putting significant amounts of capital into an investment that might never give you a good return. Still, as long as you can make the payments, this is probably the default option, and it's not necessarily a bad one. Eventually — no matter what happens to the real estate market — you'll be above water on the mortgage. (In fact, eventually you'll pay off the mortgage and own the house free and clear.)
2. Rent it out.
If you can rent the house for enough to cover the expenses of ownership, then you can move into a less expensive place and live there. In fact, even if the rent doesn't quite cover the costs, you can still come out ahead if you can find a place to live that's cheaper (and reliable tenants).
Less drastic than that, you could rent out a room. That could make staying in the house as economical as moving someplace cheaper. In fact, there's no need to stop at renting out just one room — if you have a big house, you could potentially rent out two or three. At the far extreme, you could move into the basement and then rent out the whole rest of the house to another family. Not what you had in mind when you bought it, but perhaps better than losing the place to foreclosure.
3. Short sale.
This is where you get the bank's permission to sell the house for less than the balance due on the mortgage. Sometimes the bank will settle for the sale price and wipe out the debt. Other times they still expect you to pay part or even all of the difference — the balance due is just converted into an unsecured loan. Even in the latter case, you at least owe a lot less money. (Of course, you also have no place to live.)
This is one case where you really have to check with a lawyer. If the bank forgives any of the loan, the IRS may treat that amount as taxable income.
4. Walk away.
In some places, mortgages are often made on a non-recourse basis — that is, the bank can take your house, but can't come after you for any balance due on your mortgage. (Check with a lawyer! This is not true everywhere — and even places where it is often true it isn't always true.)
Often better than literally just walking away is to negotiate what's called a deed-in-lieu, where the bank agrees to take the deed and forgive the balance owed on the mortgage.
The way to do this is to:
1. Offer the bank a deed-in-lieu.
2. Stop making payments.
3. Continue to live in the house.
This gives you a certain amount of leverage, because taking your offer saves the bank the trouble of foreclosing (and the risk that you'll trash the house the day before they foreclose). It also (since you're living rent-free until the bank ether agrees or forecloses) gives you a chance to save up some money. (Save it in a different bank!) That's going to be important: You're going to need it to find another place to live, and your access to credit is going to be limited for quite some time if you try this option.
5. Bankruptcy.
Especially if a lot of your assets are in retirement plans (which you generally get to keep), bankruptcy is one option for households with an untenable cost structure.
Yet again, check with a lawyer. There are certain things that you get to keep in a bankruptcy, but they vary from state to state. Making the right moves before a bankruptcy filing can save you thousands of dollars. For example, the tools of your trade are usually protected, so you wouldn't want to sell them before the bankruptcy filing — you'd be turning a protected asset into something that's up for grabs.

HOWEVER A BALANCED VIEW
1. DON’T think a homeowner’s assistance program will magically solve your problems. Programs like HAMP, HAFA, and HARP all promise to reduce your monthly mortgage payments. However, they offer no relief from the burden of repaying the principal amount of the loan. You still need to repay everything that you borrowed, whether or not you can still sell the house for that amount or not. Having your monthly bills reduced may help you get back on more secure financial ground, but it won’t change the fact that you remain burdened by a house valued at less than what you owe on it.
2. DON’T jump at a short sale. Selling your house for less than the value of the mortgage will not restore your damaged credit; it will not necessarily even let you off the hook for the balance that you owe on your mortgage once your bank has received the proceeds from the sale. In some states, the bank can try to collect the difference for up to six years. Finally, you may go through the wrenching emotional decision to sell your home for less than you owe, and then, the bank, which has the final word on whether or not they will accept the short offer, can take so long that the deal will fall apart. You will have turned your life (and probably your family’s) upside down for no apparent good reason.
3. DON’T trash your home and abandon it to foreclosure. It may be tempting to take “revenge” on the lender by walking away and leaving them with an undesirable property. This is a huge mistake that despondent and angry homeowners too often make. Leaving a home in foreclosure invites real estate speculators to buy an “as is” house and turn it into a rental property. Such devalued properties bring down the qualities of neighborhoods, reducing the value of nearby homes.
4. DON’T ignore the rest of your financial picture. There are real resources you can draw upon to keep your finances stable while you work to save your home without destroying your credit. If you have the stamina and temperament, you can wait out the slow-moving bureaucracy to obtain a loan modification that offers real relief. You can think outside the box, exploring leaseback options, home sharing, or other non-traditional arrangements. Seek reputable counsel to set in place ways to safeguard your credit, manage your daily spending, and secure your future affairs. Most important: educate yourself. The truth right now is that the outlook for the average homeowner is bleak. If someone offers you a deal that seems too good to be true, it most likely is.
5. DON’T panic, but stay realistic. In all of the solutions for getting out from an underwater housing situation, you must force the lender to come to you. You cannot count on parity, equality, good faith—you can’t count on any promises—on the part of the lender. The fact is, you took their money on their terms and now they are entitled to take your money every month, change your interest, take or sell your house.

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rich

Hi,
POOR RATING…… I gave you a straight forward and correct answer. . Maybe you had an answer in mind that you wanted me to confirm. PLUS ANOTHER EXPERT AGREED WITH ME!

Please reconsider your rating. Being paid is not important to me, but I take great pride in my work here. And that is demonstrated by my high positive feedback on this site.

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