Home prices are beginning to fall. I'd deal with them again, when prices have dropped by 10% - or 15% in your area. Then... offer them $2,500. I wouldn't offer them a cent more, and quite honestly, I would go out of my way to ignore any calls, or letters from them. Two can play at being difficult.The third is with a credit union. I talked to the manager of the collections department several months back because I've had similar thoughts since the beginning of this mess. Nice lady, but she told me that the goal of the board that makes those decisions is to guarantee that I have no chance to benefit from the situation. Said they would have no problem approving a short sale no matter how small of an amount they get because then they are sure that the house is out of my hands.
Said that if they were to accept a settlement, I could possibly hold on to the house and sell years later after it appreciates and end up coming out ahead. They'll won't allow that to happen. She told me I should try for a short sale.