Open Question: More homeowner woes in Southern California...

[Administrator]

I own a home that was refinanced a few years ago. I also have a second mortgage. Both are 30 year fixed mortgages. The second was taken out to buy out my ex as part of a divorce settlement.My company just layed off several people. I make a very good living, but I am very concerned that another round of layoffs is coming, and that I might be a casualty. In fact, my industry in general is hurting right now, and getting a job with similar compensation would be difficult.As for the note on the property, I owe $530K (includes a second mortgage of $135K), on a house that is probably worth $425K (at best) right now. If I do lose my job and can't get another, (which pays enough to allow me to afford the mortgages), in a reasonable period of time, does it make sense to drain my savings for a house that is losing value? Then what? I will be broke and jobless (or under-employed). It seems that I would lose the house anyway...but walk away with nothing in the bank if I try to hold on to the bitter end.I don't have the same issues as sub-prime borrowers, but I am being impacted by the bad economy AND all the foreclosures driving home values into the toilet. Do I want to invest $48K per year (one year's worth of payments) for a house that is losing value? If it took 5 years for housing to recover, that's nearly a quarter of a million dollars spent...for what? To just "break even"? Is that a smart plan? Tax advantages will be moot if I am not working.Is it worse to dump every last penny into a house that is depreciating? Is that smarter (and more economical) than getting killed on my credit?In summary, if I do lose my job, my thought is to immediately bail out of the house (unless my creditors are willing to go the extra mile to help me). I see no value in taking the moral ‘high road’ as I lose everything. I do believe in living up to my obligations. But I also believe that common sense has its place too.I would love some advice.This scenario only applies IF I lose my job.Hey 'vb', you missed my point completely...but thanks anyway.

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