Should I Walk Away??? You Be the Judge...

[Joel Fraser]

Hello everyone,I am in a dilemma and I can't seem to find a way out. In Nov. 2004, my Chap. 7 bankruptcy was discharged. At the time I had a ton of CC debt and two mortgages due to trying to finance a fledgling non-profit that eventually failed and did not want to lose my home. I did manage to keep my home, and several months later I decided that it would be worth it to re-affirm my first mortgage; I live in an area of NC that is growing rapidly and is one of the few places in the country to not see a decline in property values. I did not reaffirm the second mortgage, though I have continued to may on-time payments.Fast forward to Feb. 2008. Interest rates drop, and I want to refinance the 1st mortgage (currently at 6.75%). Well, the 2nd mortgage company - Homecomings Financial, a part of GMAC - refused to subordinate (very nasty customer service rep., by the way), and would only help by refinancing both mortgages. But guess what? Because of the bankruptcy and the amounts of the mortgages, they denied me. :mad: So I'm in a Catch 22.I have lost hours at work and more are planned to be cut...I've tried to freelance to make additional cash but it's hit or miss much of the time. I have the opportunity to become housemates with someone in their home, which would be great and far more affordable for me, but I don't know what to do with my home. Renting it would still cause me to have to pay approximately $600-700 a month because the rent that I could charge would not cover the 1st mortgage completely and the second mortgage would remain as well. I couldn't afford to do that and help out on the bills and mortgage for my friend's home. If I sell it, I will be in the hole. There are few homes on my street selling for about $174K that are the same floor plan as mine, but they have upgrades that I don't have. Both mortgages add up to $168K, so once you put in the real estate agent fees and everything else, I'm in the red.Here's my thought...what if I just walk away altogether? My credit is pretty much screwed until 2014, so tacking on 1 more year because of a foreclosure is a very small price to pay. The main reason I haven't jumped at the chance is because my ex-husband is still on the 1st mortgage (not the second one). We have a decent relationship and I have tried to get him taken off of the mortgage by having filed a quit claim deed and trying to refinance, but interest rates at the time were higher than my rate so I couldn't refinance only in my name (it's a no-closing cost FHA loan). A foreclosure would kill his credit score.I've thought about playing hardball with Homecomings by not paying them and seeing if they will settle for a lower payoff, but that still leaves me paying my first mortgage and not moving for a while. Does anyone have any advice or suggestions on other possible options that I'm not seeing? :(Thanks in advance,Julia