Not sure if this is the right area to post this, pardon me if it's not.
Here is the situation:
I live in Illinois, My wife and I purchased a home right before the turn of the market. We purchased the home for $232,000 and it its now worth $164,000. We have a 80/20 loan and our lenders are Indymac/citi. We bought the house with 0 % down so there is no escrow there. We are Thinking of walking away from our home and are willing to take a hit on our credit.
Recently out of curiosity We went and tried to apply for a FHA loan. To my surprise today we got pre approved for $180,000. Now we are considering buying and bailing on our old home(if possible), but my question is can this be done with a FHA loan and what are the risk of doing this.
I am aware that in the state of Illinois lenders are able to collect deficiency.
Has anyone here succeeded with something like this? Thanks for any advice.