[scmsurf]

Here is my situation.

I have a rental property in FL and live in CA. This property was supposed to be a 'flip' property that turned into a rental property situation with the recent downturn in the market. The house was built in 2006.

I recently opened my mortgage bill from Chase only to see that my payment had incresed $412/ month. It appears that I was only paying taxes on the land and this cost was rolled into the loan. Now I am being taxed on the house on the land as well. That explains the increase in payment.

I have been going negative about $ 1000/ month and can not affors to lose any more. As a result I can no longer afford to make the payments. I have the 1st with Chase at about 170K and a 2nd of about 30K that now goes to FDIC as the local bank that was lending on this loan decided to stop making their payments and went under. The house is currently occupied by great tenants. The tenants recently expressed interest in possibly purchasing the house.

This will be the first month (4/09) that I am defaulting. I currently have a property manager/ realtor that performs short sales. She mentioned that I should contact Chase's Pre- Foreclosure Dept. Does anybody have any contact information (phone #, etc.) for this dept?

I am hoping to move forward on a short sale. My realtor told me that since the 2nd lienholder went under that this should lessen some of the complications that the secondary lienholder can create in short sale situations. Is this true? I have been told that I can probably sell for about 110K, about 90K less that I purchased for. I am aware that I will be 1099'd for this difference and I am preparing for that. My wife and I have been renting a great property in CA all along and are planning on sticking it out here for a couple of years after all of this blows over. We hope to purchase something out here a couple of years from now.

Any help will be greatly appreciated.

scmsurf