If you just want to get out from under it, a short sale is a great idea. Working with more than one bank certainly complicates things, but not impossible. I have negotiated on 2 mortgages several time for sellers to a successful closing

As an investor, I agree more with James on shorting the second. If I were to pursue this property, then my first choice of an exit-strategy for this property is to short the second, and assume the first. The second lien holder knows it's in a less secure position; most second lien holders become a lot more amiable when a skilled negotiator reminds them of this fact.

Please feel free to PM me for more info.

Purple It sounds like the first will not be short but the second one will be from what you have written. It is possible to go short but the second has to agree to it to release their lien. The second may ask for you to sign a personal note for the balance of the loan or a portion of it to release the lien.
Middletown has been declining for the last couple of years in price so it would not be hard to show the need to accept a payoff for less than the loan balance.
The key is to get both lenders to partner up and avoid other actions that they may have to take.
Feel free to give me a call.
Jim Gordon
Sibcy Cline Realtors®
513-886-5250

This sounds likt good criteria for a short sale. Hire an EXPERIENCED short sale agent to help....interview at least three befor e choosing.