Tough workouts

Many Americans have lost their jobs in recent months, while others have seen their incomes drop. Ken Mobley is one of those. He had some of his best earnings years ever in the mid-2000s, as an advertising sales representative for a media company. But with newspaper ad revenues in decline, he was "reorganized" by his company and now sells ads to mom-and-pop businesses.

"With all of these changes my commissions have fallen substantially," he said, "and for the past 18 months I've been supplementing my monthly shortfalls by withdrawing money from an IRA."

He called his lender last fall hoping for a hardship consideration and asking for a two-month postponement of his mortgage payments. He wanted to have them added to the end of his mortgage. Mobley says his credit rating was excellent, and he was merely trying to free up some cash for the holidays. The effort failed."I was told that until I was late, there was little they could do as I wasn't experiencing any obvious hardship from their perspective," he explains.

His Catch 22 is that, although he could foresee a big problem on the horizon, until the problem finally hits home, his requests to deal with it fell on deaf ears. A major factor is that Mobley bought the house 22 months ago, before Tampa prices started to drop precipitously. He has no equity so he can't refinance. Otherwise, he might be able to take advantage of low interest rates now to whittle his mortgage payment down to a more affordable level.

"Everywhere I turn, I seem to end up on a dead end street," he said. "Since I haven't been late on any payments, haven't defaulted on any loans and currently have managed to maintain an excellent credit rating, all attempts to change my situation have failed."

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