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"Irwin later sold her loan to a national mortgage company, which would not work with her when she fell behind in payments.

The reason: "They basically are telling me I don't have enough income to maintain the mortgage," said Barnes, who said she now earns $4,000 a year more than when she bought the house."

I find this a little hard to believe, most fiancial instituitions are willing to work with people because foreclosure is expensive, time consuming and in many cases
the get a house back in poor condition.

Most states also have many borrower friendly legal provisions to avoid forclosure, such as one in the state I live, the lending instition can't initiate foreclosure if the borrower is making a "reasonable attempt" to sell the home. If nothing else, this women could use a provision such as this to avoid imminent forclosure and buy herself a few months to catch up on her payments if the bank won't work with her.

By working with her, she probably means much more time than 3 months. On $25,000, she's having big trouble making any payments --- much less 3 months payments plus interest.

I think some of these people are better off walking away ---- there is no way they can keep these mortgages going.

"They basically are telling me I don't have enough income to maintain the mortgage," said Barnes, who said she now earns $4,000 a year more than when she bought the house." I find this a little hard to believe, most fiancial instituitions are willing to work with people because foreclosure is expensive, time consuming and in many cases the get a house back in poor condition.

No, it's true. I am having a similar experience. I got our East Coast house in a divorce settlement and, despite having a modest post-divorce income, I have made the payments on it faithfully at the first of every month. But the mortgage company told me candidly that I can't afford it, and they want to call my 6.5%, 30-year-fixed mortgage.

Well, I've been affording this loan, plus the taxes, plus the rest of my pleasant lifestyle, for nine years now. But very well, I say. You call the loan and I'll refinance to get a cheaper mortgage--say, 5.75% or 6%.

No, they say; you can't afford that either.

But the new loan will result in mortgage payments even lower than what I've been happily paying for nine years, I protest. And my income is higher now than it was just after the divorce, and my credit better.

In response, they give a corporate shrug.

I'm shaking my head in puzzlement at this illogic. Good thing I was planning to sell this big place and use the profilts to buy an ante-bellum farm instead.