Cause

• The primary reason that you could be upside down on your mortgage is that property values in your area have decreased. This typically happens during a downturn in the real estate market. You could also be upside down on your home because of the loans that you have used. Some loans allow you to borrow 125 percent of the value of your home, which would also put you in an upside down position. When you borrow too much money and property values decrease, these factors can combine to put you in a large negative equity position on your home.
  
  

Wait

• When you are upside down on your mortgage, you could take a long-term approach to remedy the problem. Even though you are upside down now, you will not be in this position forever. As you continue to make payments on your mortgage, you will reduce the balance on your loan. The real estate market is cyclical and it can bounce back again. Once it does bounce back and the value of your house increases, you won't be upside down.
  
  

Modification

• If you are having trouble making your mortgage payments, you could also pursue a loan modification. You can talk to your lender individually or you could also obtain help from the government. The Home Affordable Modification Program or HAMP is a government program that is designed to help homeowners modify their loans with their lenders. A modification will help you change the terms of your loan so that your mortgage payment will become more affordable.
  
  

Refinance

• In some cases, you may be able to refinance your existing loan. If you have an existing FHA loan, you could potentially pursue an FHA Streamline refinance loan. This is a program that allows you to refinance your existing home even if you are upside down. It will help you lower your payments and your interest rate. Other lenders may also offer you programs that can help you get into a more attractive mortgage loan.
  
  

Foreclosure

• While it is not always the most attractive option, sometimes it makes sense to go through the foreclosure process. Instead of continuing to struggle for many years, you could walk away from the house and start over. The foreclosure will remain on your credit report for seven years and it could make it difficult to get a mortgage again in the future. If you need to leave your home and you cannot sell it because you are upside down, this might be the only option you have left.