[Dazed and Confused]

We bought our townhome 5 years ago for $355,000. First mortgage is $280,000 and 2nd is $50,000. We have had the house on the market for 16 months. We started at $335,000 and are now down to $295,000. This past week we learned that a neighbor did a short sell on their unit for $225,000 and another listed their's this week for $199,000! A year ago we went to the 2nd mortgage company to ask them if they would work with us on the balance of this. They refused. My wife and I are ready to throw in the towel and walk from the mortgages. We have excellent credit (780) and have never missed a payment. Suggestions please!

[self.coach]

Walk away. The system screwed you anyways, its time for payback. Does not make sense to pay that much of an underwater loan - could be a huge chunk of your lifetime savings. Walk away, proudly, without any sense of guilt. Just be prepared to use cash instead of credit for the next 10 years (maximum).Some people talk about character or honor. That's trash talk - its not going to pay your bills. Watch CNBC's episode on people walking away. They are enjoying the cash flow of a lifetime.