So the question really shouldn’t be, “my house has dropped in value…why won’t they reduce my mortgage?” It should be “why would any lender be willing to reduce anyone’s mortgage?” Answer? (Hint: it isn’t out of any sense of moral obligation or sympathy.) It’s simply money. Lenders figure that in some cases if they keep the homeowner in the home, they’ll lose less money than if they kick them to the curb, take the home back in a foreclosure and resell it.

Bottom line? Sometimes people who can’t meet their obligations get “special treatment.” (Although I doubt those who jump through these hoops feel very special when it’s all over.) But only because it ultimately benefits the lender.

And as for the rest of us who happen to be fortunate enough to continue meeting our obligations? We’re expected to do exactly that: meet our obligations. Whether the housing market is up, down or sideways. Fair? Hell no. But it’s the way of the world. And one reason, btw, that I only borrow when I have to and never more than I absolutely need.