What to do first?

[Ashtarta]

First background- We are in Dayton, Ohio. We moved into this house in the end of 2002 on a land contract. We were very young and didn't really know anything about buying a house but since these people came to us saying land contract we said oh boy!! a house and moved in.

Near the end of 2005 we got an actual loan from National City Mortgage. In 2007 the problems began, it seemed like every single month something large was happening that required money we didn't have (car breaking down, death in the family etc.) At this point is when we started not being able to pay the payments on time.

After almost a year of late payments we missed about 3 months of payments and they "redid" the loan adding in the money we hadn't paid back into the loan and starting from there with a new loan. This was all completed near the end of 2008/ beginning of 2009.

Once again the car we had at the time broke down along with the general rising of all other basic needs prices and made the payments late again. This time they set up a payment plan stating it had to be paid on time or would go into foreclosure, with the payments being even more then before (that we couldn't afford then anyway!!) The end of this month is the first payment due for this payment plan.

Since last year we had been planning on moving soon. We have a 4 year old and don't live in a good neighborhood or school system. We have read up on quicksale and were considering it but I don't want to put money into the house to make it sell-able only to turn around and not have it sell and foreclose anyway at the end. The housing market here also is not even close to what we paid for it. The houses in this area are selling for about 2/3rds less then our house has owed on it.

We are concerned firstly that the bank will auction the house and it will sell for less then we owe. What then happens with the remainder of the money owed? Will it be demanded in a lump sum? What will the options be then since we will not have the money for anything close to paying it or making payments? Is it possible for the bank to garnish wages?

Also after reading other posts, are credit unions safe to keep my husbands check depositing into or should we be keeping cash only??

And lastly I saw mentioned not to leave until the house is foreclosed. Our concern is that once the house is foreclosed we won't be able to find an apartment that will accept us. What can the downfall be of leaving the house empty until the foreclosure is complete? And how long (approx.) from the time of this months missed payment will we have before we receive the foreclosure papers?