Borrowers sometimes find themselves in over their heads. One way to avoid foreclosure or default is to use a workout program. These days, workout programs are becoming more and more popular -- adjustable rate mortgages and rising rates have caught a lot of homeowners off guard.
Banks will work with you if it's possible. They want to avoid foreclosure as much as you do. However, you have to be proactive and communicate with them before it's too late.
Further reading:
I applied for a Bank of America HELOC then changed my mind and declined to sign the docs. Bank of America in Arizona, paid off my second mortgage and funded the HELOC without signature. They realized their error and offered me a fixed rate mortgage at the rate I requested of 6.24%. They have now established two loans for me. They are also demanding that I sign the original loan documents at 8.49% variable or they will convert the loan to an unsecured loan. What can I do?