Nice smoker analogy. It points out that the mortgage arena is not the only place where we subsidize stupidity (or bad judgment).
But, since you can comfortably afford the payment, I think it may be short-sighted to try to get a loan mod now, depending on the restrictions they might place. Why get a small chunk now, when you can get a larger concession in the future. It also will restrict your use of the property (e.g. you may not be able to rent it out if you want). I would wait another 12 months to see how far underwater you might ultimately be, then make a decision. Your best course might be to refinance or take a mod under Obama’s new program if it comes to fruition.
If I were you I wouldn’t walk now or take any loan mods until I can smell the bottom. Once you see how low things get you’ll get your best deal on a loan mod, refi, or whatever.
You should treat this exactly the same way as those who are renting with a comfortable monthly payment waiting for bottom before taking action and taking advantage of the market.
