We bought 5 acres and built a home a couple of years ago in CA. Before we were done with construction we needed more money to finish the house and were able to get a HELOC to finish construction. When we finished building our construction loan was converted to a permanent mortgage at a ridiculous interest rate. We immediately refinanced to a better rate, but we did not pull any equity out nor did we ever pull any additional fund out of our HELOC. We have been struggling the last 6 months and contacted CitiMortgage to try a modification. Our house has been on the market since October. In December they gave me a 3 month moratorium. I have been trying since December to ge ta modification and the best offer I have received is a 20% reduction for 3 months at the end of which a balloon payment would be due. Our moratorium will now be lifted and so we will be three months behind. It now seems to be the time to make the decision to walk and not seeing any convincing reason to try to work out an alternative scenerio. The bank wants a ton of info for a short sale or deed in lieu, with no guaruntee they will accept the offer or a bunch of money to even be considered for a modification. Is there something I have not considered? Any ideas or wisdom?