The government run systems which I linked below have since been improved. The new, higher limit for refinances is now up to 125% of the present value. That means if your present loan amount is $400k, and the declined value of your property is only $350k, you can now get a refinance at today's lower rates.

Of course if your house is that value in Orange County, in today's hot market, you could probably sell it quickly, with multiple offers, if you'd prefer to sell, rather than stay in the property.

Here are links to see if you can qualify for either a refi ( if your first mortgage doesn't exceed 105% of your home's present value.) or a loan modification:

http://www.makinghomeaffordable.gov/

To see if your mortgage is with Fannie Mae: http://www.fanniemae.com/homepath/homeaffordable.jhtml

To see if your mortgage is with Freddie Mac: http://www.freddiemac.com/corporate/buyown/english/avoiding_…

Loan mod self assessment tool: http://www.financialstability.gov/makinghomeaffordable/.

Good luck in finding solutions - that are FREE.

Sorry to hear about your situation. You are not alone. There are millions like you. Real estate is not a good investment, I guess you know that now. Good luck

Hey Cesar, Have you tried to work out a loan modification with the bank or negotiate a short sale?

As I understand it, in California purchase mortgages are non recourse, meaning that they cannot come after you for any of their loss. However, if the loan was a re-fi, they can.

Cesar,

As long as you continue to make payments on the other home they can not force you to sell or take your home from you. If you consider Bankruptcy however, a judge may have different ideas about how to put you in a position where you can more easily afford your monthly obligations.

Let me know if you would like someone to contact your lenders on your behalf at no charge. DO NOT pay anyone upfront to help you negotiate with your current lenders. Too many scams out there.