This article from the Chicago Tribune made a point about lenders that’s an unfortunate reality:
The more equity you have in your home, the less eager your lender may be to work with you. It’s an ironic fallout of the foreclosure crisis that those who have been the most diligent about making payments and have lived in their homes the longest are most at risk. Simply put, the lender can take what you’ve already paid in equity, sell the home for less than it’s worth and still make money.
When lenders work with borrowers to put off foreclosure, it’s all about themselves, not the borrowers. The lenders have a business reason for working with a borrower who’s upside-down and falling behind on their payments. Foreclosure and repossession are expensive prospects, and taking less money in now in order to keep the payments coming back is far better selling a property at a loss, and paying foreclosure costs, or even worse, going through the foreclosure process and not finding another buyer.
If the borrower is not upside-down, but instead has equity the asset, it’s very little risk for the lender just to take it back and sell it. A loan balance equal to half of the house’s value is far less risky for the lender — and far riskier for the borrower — than a fresh loan with a low down payment, or one that was written a couple of years ago when housing prices were at their highest.
This is unfortunate. If you’re in a position with a fair bit of equity in your home, guard your income streams zealously, and do everything you can to keep your mortgage payments going out on time. It’s just not worth your lender’s time to work that hard with you.