1st and 2nd Mortgages with Countrywide...HELP!!

[Joel Fraser]

Hello Everyone, I'm new here, so bear with me! I will try to give as much information as possible so I can get the best possible advice on my situation. I have two mortgages, both with Countrywide. 1st Mortgage Interest Only for five years (due to reset 07/10, just refinanced 07/05) approximately $720,000...monthly payment of approximately $4,500, 2nd Mortgage approximately $70,000...monthly payment of approximately $500. The first mortgage ihas a soft prepay penalty for the first 3 years. My husband works at a major resort on the strip in Las Vegas and I am a stay at home mom. The mortgage on the home is only in my husband's name and the title bears both our names. Needless to say, due to the economy, business has been slow, therefore, my husband has been seeing a decrease in his salary, which relies heavily on tips and out of state business conventions. Because we have been seeing the paychecks decrease gradually over time, we placed our house on the market in February of '08 for $869,000. Just enough, with a little to spare after closing costs and realtor fees. Two weeks ago, we dropped the price of the home to $849,000. Home values in Las Vegas continue to drop and foreclosures are everywhere, I doubt we'll be able to sell the house at its asking price. In fact, probably not more than $700,000. That's where it gets sticky. No money to pay the difference, should we short sell, ask for a loan modification to make the payments easier (we are not late /delinquent on mortgages), foreclose? I am sorry to say that both my husband and I are very proud people, we would hate to lose our home and see ourselves in a rental. Is it possible these days for a stay at home mom to qualify for a mortgage, (no income and credit somewhere in the mid 600's), the income coming in would be based on my husband's salary. I have put together a request for a loan modification thru Countrywide but am not sure if that's where I should start (everyone I speak to says we have to be behind on the mortgage for Countrywide to even hear us). I need advice!! Please help! ..short sell?..request loan modification..foreclose..purchase home under my name only Thanks!!