Your alternatives are
* to short sale the house, and negotiate the lower amount that the lienholders will accept, with you possibly paying the difference,
* accept the possibility that the lenders will pursue you in court for the differences in a foreclosure, or
* file for bankruptcy, which MAY wipe out all subsequent liens against you.
In all cases, I would suggest you sit with an attorney to understand the options and how they affect you long term.
It sounds like your ex-husband is not understanding how those options will affect him as well. If I were you, I might offer to pay his consulting fee to have someone explain his options to him. I would think that he would want to select an option that would be least detrimental to himself financially, no matter what his feelings are for you. But he may need to obtain this information without feeling you are influencing the decision he would make.
Might that be the case? You can always have him read the blogs here on Trulia! :)
This is more of a question to answer for your specific situation with an attorney. I would recommend calling Stephen Beede at BPE law group in Fair Oaks. For $200 he will meet with you and explain all the details for your specific loan situation, and review your loan documents to define your rights and the rights of your lenders.
'Everyone' is correct that the second gets wiped out in terms of securing their loan against the property in a foreclosure. But it doesn't mean the second doesn't have other alternatives to pursue you for repayment.
This is a shortened explanation, but should emphasize another reason why a short sale is definitely better than a foreclosure on your home.
Since I'm on both notes with my ex-husband it has been hard as well, because now he doesn't want to do the short sale. Is there anyway I can go forward with the short sale if he doesn't want to quit claim the house to me?
Not all second loan wipes out just like that whether you do short sale or foreclosure. But, In short sale, at least you have a chance to negotiate with the lenders for not to follow for remaining balance or some kind of re-payment plans. Consult with a CPA or attorney for any tax ramifications. If you are planning to do short sale then list with an experienced agent who successfully closed any short sale transactions or at least have certification in short sale.
Certified Short Sale Specialist