Ouch - not a good position to be in at all. Perhaps if you talk to your lender about renegotiating the terms of the loan to something you can afford, they may be willing to help you - go to the lender who originated your loan and talk to them about it rather than the person in the corporate office who is servicing the loan.
You should also talk with a local real estate agent (I know a good one in the Jacksonville area if you don't already know someone) about what the options are in your market and if your market looks like it may turn around shortly?
Foreclosure is not a good solution if you can avoid it. It will affect your credit and your future interest rates for years to come, not to mention the potential tax consequences you may face. If you don't have a choice, you don't have a choice but get good sound advice from local professionals before you make a decision. They know your market best.... more