Many Baby Boomers are in a situation where they can struggle and continue to make payments on an upside down home, but does it make sense? 

For example, if the value of your home has dropped by fifty percent and your mortgages exceed current market value by $100,000, it could take 5, 8 or 10 years or more to recover enough value just to sell your home and break even.  For Baby Boomers, time is the enemy.  Most will not want to postpone their retirement or re-arranging their lives that long just to benefit a lender.  And they certainly are reluctant to tap their savings just to stay afloat in what has become a financial albatross.

So what can they do?  Many are biting the bullet and letting the houses go into foreclosure.  But this carries severe penalties, foremost among which is the inability to purchase a new home for 7-10 years and a major ding on your credit report. 

An alternate is a strategic short sale...if you can pull it off.  It depends on the lender and who is on your team.  Whatever you do, never contact the lender directly to discuss a short sale - work with an expert and understand the tax consequences before you do anything! 

Lenders don't give a !*#% about your situation.  But, given the right argument by a knowledgeable person, they may see the light and accept that agreeing to a short sale payoff is economically better than having the property go into foreclose.  Here's a good example of the resources that are out there to help Baby Boomers who want a short sale but can't prove a hardship to the degree that normally satisfies lenders.

The message to Baby Boomers is "don't give up...and don't play the lenders game!"  Any American with half a brain now clearly understands that the lending institutions will gladly take our tax dollars, continue to make risky decisions knowing we have to bail them out and pay their executives huge bonuses no matter that the rest of us are suffering.  They are not on the public's side.  Screw em!  Fight back and salvage your senior years.