Even if your loan is a Assumable Mortgage, the pricipal balance on your account can be reduced.  The US Treasury Department implemented a program called the “hardest hit fund” in 2010.   The Obama Administration recognized this economy had burried homes so far underwater there was no other way to restore the homeowner without simply writing off the debt.  Struggling with mortgage payments or facing foreclosure can be overwhelming and frightening for homeowners. Especially when you cant sell because the balance is underwater.  To get rid of the negative equity, this is how its being done.  You have to call your lender to start the process and you must live in one of the following states to be eligible:  Alabama, Arizona, California, District of Columbia,Florida, Georgia, Illinois, Kentucky, Michigan, Mississippi, North Carolina, New Jersey, Nevada, Ohio, Oregon, Rhode Island, South Carolina, Tennessee.