Be careful with some of these loan modification companies, make sure you check them out and don't give any money up front.

Cyndi... you seem to be confused on exactly what your options are. I can help. I am very experienced in Loan Modifications and Short Sales (Land Trust will not help your situation). These are your best options. I work with a national company that has been super successful with bank/lender negotiations. Foreclosure has options... you may be able to keep your home. For a free consultation please go to http://www.BuyIn72Hours.com and enter your contact info. This will preserve your privacy as I am the only one who has access to your info. Looking forward to providing solutions. Thanks Bob

Lets do a short sale. Much Easier. Just short sale it to a family member or close friend. I am very experienced in short sales and reos. Have 50+ active listings and work 7 days a week

I wish you luck. But you may be confusing several different options.

First, a hard money loan generally is made on the basis of assets involved. If someone wanted to buy a property valued at, say, $400,000, a hard money lender might lend $280,000 and insist on being in first position. No hard money lender is going to lend you even close to $400,000 (if that's the true value of your property), much less anything above that. Sorry.

Second, a land trust won't help, either. A land trust is a terrific device to do all sorts of things. But it's not going to shield you from bankruptcy or foreclosure. And while it can work for someone upside down on their mortgage, your numbers appear too far off. You'd need an investor to come in to make up your deficiency--about $20,000 after you figure in legal fees, penalties, and interest, I'd guess. Then there has to be a strategy to pay the mortgage going forward. Then there has to be an exit strategy. And for that to work, the timeline must be long enough to allow appreciation (and principal build-up, not negative amortization) to bring the value of the property above the amount of the mortgage. And in California, with those numbers, it might be 8-10 years.

Then, there's the issue of you staying in your home. Even with a land trust, investors are very, very, very reluctant to let owners stay in their properties. Lot of reasons for that.

On top of all that, for the lender to consider any proposal from you, you'd have to demonstrate to the lender that, from this point forward, you could make the payments. Can you do that?

My suggestions: First, contact the lender directly. Don't wait. You do it yourself. Today. Now.

Second, as soon as you've contacted the lender to let them know that you want to work something out, and that you're not ignoring them, then contact a reputable financial planner. Preferably a CPA (though there are good ones who aren't, too.) You need to know exactly where you are with your finances. (Possibly, as suggested below, a HUD approved counseling agent.) Then contact one or more Realtors to get a CMA on your property. And, at some point, you'll need to contact a good attorney, too.

Not the advice you were probably hoping for, but that's what you've got to do.

There are many people out there trying to take advantage of situations exactly like yours. Try a HUD approved housing counseling agent:

http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm