I had a client that got an offer like this a year ago and have heard of others. It’s a de facto principal reduction. I blogged about this a month ago and was attacked by Rt 66 as telling lies. Here’s aother example from a disinterested party.

Once he does this, he could go for a HAMP modification on his 1st which is likely a convential loan. He could probably get below rental cost for the next 5 years.