80/20; HELOC already sold

[avwill]

Hi,

I bought my first home, a condo in FL with an 80/20 loan in Sept 05. It was with Chase for both loans. In 2007, I relocated with my company to North Carolina and was able to rent out the property for about 6 months. My renters then left the property and I was unable to find others even after hiring a property management company, so for the last 1.5 years I was paying my mortgage in Florida and renting an apartment in North Carolina. During this time period, I listed the condo for sale and tried to do a short sale. Though I had an offer for 95k, Chase rejected it (80 is for 95k and 20 is for 25k). Due to my declining commissions (I sold building materials), I just couldn't do it anymore and stopped paying on both loans in July. (One month before the short sale offer was rejected.) Now I am trying to work with Chase to do a died-in-lieu on the first mortgage (which btw the condos in my complex are now listed in the 70's!) but I have started receiving collection calls on the 2nd. They are telling me that I owe them 26k. I now am unemployed, however, and barely have enough money to pay for my expenses in North Carolina. I have always had an excellent credit score and want to rebuild it after this crisis, but there is no way I can make any payments at this time. So...my questions are 1. If the HELOC has already been sold to a collection agency (though my house has not yet technically foreclosed) does does that mean I have a deficiency judgement? 2. Once the house is foreclosed or gone through a deed-in-lieu, does the collection agency still have to go after me for the debt, even with me living in a different state, or can it be forgiven through a foreclosure in the property? 3. How do I deal with the collection calls for now? Do I ignore them? What should I say?

Thank you for any advice!