Those with subprime mortgages got caught in a trap not of their own making. Everyone, including this blogger, told you to go ahead and get the 2/28 or the 3/27 mortgage, spend the next two or three years cleaning up your credit, and then you'd be able to refinance into a prime conventional or FHA mortgage with a lower interest rate. And it was a good strategy, if home values had held.

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There is absolutely no reason for anyone today to be in a bad credit mortgage. If you are, there are programs designed to get you out. First, you are probably paying more than 31% of your income for housing -- if you are, that's the first qualification for a modification. Take your gross (before tax) income, multiple that by .31. If your house payment, including principal, interest, property taxes, homeowners' insurance, and HOA dues is more than that number, you may be eligible for a mortgage modification under Making Home Affordable.

Now, here's the other end of the equation: Take your current mortgage balance and run these numbers through a mortgage calculator. Your current balance is the new loan amount, your new mortgage term is 40 years, and your new interest rate is 2%. Take that number, add in your insurance, property taxes, and HOA dues, and see if that number is less than 31% of your gross income. If it does, a modification could bring your payment to a makeable number and your lender could be fairly confident that the modification would stick if they gave you one. Keep in mind, the lender will want to verify your income -- there are no stated income modifications. But even unemployed people may qualify for mortgage help.

Most people who want a mortgage modification have to prove that they have experienced some hardship in order to qualify for one. But, because you have a yucky sub-prime loan, you can demonstrate the hardship of a sharply increasing payment. And if you can show that you cleaned up your credit with the goal of refinancing but can't because of your home's value, more power to you.

Check out the rest of the requirements for the Making Home Affordable program. But even if you don;t qualify for the program, your lender can modify your loan anyway. You have nothing to lose by asking.