Your house is in LA which I'm sure is worth alot if in a good aera of LA. It always makes me deepingly saddedned to hear questions of your at the end of the day because I was there when these products were out and everyone thought they were great! THerefore Im not going to give you nobel-peace prize winning advice. I will say you are in the same boat as many americans and you HAVE to make the wisest decisions to get out of it and lose the least amount of money if it comes down to it.
Most likely you are in a option ARM, which you have 4 different payments you can make per month, if choose to make the lowest payment every month your mortgage balance accrues. I don;t know how this product was presented to you, (Most likely in 2005), but it is a very risky product if you do not understand its full capacity it can be detrimential.
I would try to work with the mortgage company as much as you can..These days they might not even be able to stay alive in this business the way things have been going. On the other hand, mortgage help is oin the way and I believe most Americans will see relief from this tradegy that plaguded this market. Therefore, I think you need to keep your head up, contact the mortgage company, try to negoiatite the best possible results and make your best effort to try to get out of the situation. It sounds like like the broker put you into a stated loan and possibly inflated your income. Either way, its not the end of the world and you will get out of this!!!!!!
I think there is going to be alot of government money on the way for situationas exactly like this!
The lenders options are your best options, how ever unpleasant they may be. Which ever option you take, be sure that your debt will be forgiven.
I'm sorry to hear about your situation, but I can help. The media sells the stories of how anyone can get help from their lender, but the new programs dont work for everyone in your situation. Feel free to call me anytime to discuss the options available to you and how we can get it done.
Unfortunately, you are not the only one who is in that predicament. And I have had so many clients telling me the same story. I would advise you to regroup and since the bank only gave you two options, I would urge you to consider a short sale. If you want I can meet with you and explain the advantages and disadvantages of your two options. Best Of Luck to You!