Millions of Americans have lost their homes to foreclosure.
Even though the government has stepped in to rescue the housing market, many more homeowners are facing the same fate.
Now some banks are taking rates into their own hands.
As a loan officer at a real estate company, Sheri Osorio knew what she was doing when she refinanced her southern California home two years ago with an adjustable rate mortgage.
she wanted to make home inprovements and buy her kids a car. What Sheri didn't count on was the real estate market tanking along with her commissions.
Her home lost half it's value. She now owes $40,000 more that it's worth and her payments are set to double next summer.
Osorio says, "I felt confident that some of my equity was going to be there and I could refinance again and because now I am upside down that is not an option."
Sheri could be part of another coming wave of foreclosures. 3.4 million homes are forecast to be foreclosed through 2011.
Government programs have not stopped the foreclosure freefall, but some lenders are finding it's now in their best interest to do so.
Francis Creighton of Mortgage Bankers Association says, "Lenders lose between 40-50 thousand on every single foreclosure that they do. Lenders are not set up to be property managers. We don't want to own these properties."
One of the most aggressive relief programs is from Bank of America. It's modifying mortgages for 395,000 borrowers....cutting interest rates to as low as 2.5% and reducing loan balances.
Other lenders may follow as support grows for new government programs allowing people to swap their risky mortgages for stable 30 year fixed loans.
Credit counselor Natalie Lohrenz says struggling homeowners should contact their lenders even before they miss a payment.
Lohrenz says, "You may have time to work with the lender to come up with a better payment plan that works better with your budget."
You may also want to get help from a credit counselor who can walk you through your options...but if they ask you to pre-pay for their advice...it's likely a scam.
Sheri Osorio wants her bank to take 120-thousand dollars off what she owes and give her a fixed rate mortgage. Osorio says, "This is my goal, to have my principal reduced and have my payment fixed and affordable in lieu of foreclosure."
At this point, neither side can afford to just walk away.
Just last week experts confirmed that the United States is officially in a recession, which has caused more instability in the housing market.