Open Question: My house is worth 256,000 less than I owe...?

[Administrator]

I am very nervous because my house has dropped significantly in value. We owe $642,000 on it and according to zillow.com it is worth $386,000. We have 3 mortgages on it 1st for $405,000, second for $107,000, third for $130,000. I called the holder of my first to see about the government refinance and they said that they are not participating...Any advice?Right now, I can afford the payments, but the house will adjust in one year(5 year fixed) and I know it will be impossible to refinance owing so much more than it is worth. There is a similar size/quality ect house a couple of doors down that has been sitting on the market at $300,000. It is in a very poor neighborhood. It was worth $600,000 when we bought it, but values have gone way down due to foreclosures and a generally poor area.

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