Like Many Others I Am In Trouble

[cjawswk2ace]

In July, 2005, I bought a house for $321,000, in a suburb of Mpls. My 1st is a interest only loan for $257,000 to CitiMortgage. My 2nd is a loan for $64,000 to Homecomings Financial. I got taken in by the realtor and his builder friend when I was buying the house in the first place. So right after I bought it, I was already in serious problems. My landscaper absconded with the funds for my landscaping and I had to pay it twice. My divorce lawer took all the rest of the cash I had. So no money in the bank.

My problem is that I am only getting paid by my ex for a short time. I have no backup plan if he doesn't pay me. (I got taken by my lawyer and they made a lousy settlement for me.) I heard wind that his businesses are failing and that I might not get anything in the near future. I am not working right now. I have been living off what he gave me. I am also in serious serious credit card debt. My sister committed suicide awhile ago. (I am mentally trying to heal from my divorce and my sister's death.)

I have not missed any payments on either of my mortgages, but I feel that soon I will not be able to make payments. I will also not be able to refinance the interest only loan and my house is worth at least $60,000 less than what I paid for it.

Would it be better to just walk away and go into foreclosure or short sell. I have talked to a realtor about short sell and she says she can help me do it. But what if they don't accept the short selll and I am liable for the shortage.

I had a heart attack 7 years ago. I have been having chest pains lately because of the stress of trying to keep up these payments know that I will lose my house soon anyway.

What do you suggest?

(I got a stated income no doc loan originally.)

I already have so much debt that I will probably never be out of it already.

What I sense is a great deal of stress. You indicate that you are not working, that your home has a reduced value bringing its current fair market down to $261K from its original $321K purchase price. Since the first loan is at @257K the entire amount of the $57K second loan appears to be close to unsecured.

In plain and simple terms the home is not an asset, it is a liability. A couple of questions before I'd attempt to provide potential solutions. What state is the property located in? Were these two loans used to buy the property?