Weird Foreclosure Situation

[ryno6]

What is the name of your state (only U.S. law)? Florida

My wife and I lost our jobs 6 months ago and fell behind with our house. We just got jobs two weeks ago but we are 20k behind on our house and the house value has dropped to 90k below what we owe on the mortgage. We are not confident that our new jobs will be long term (5 plus years).

With that said, would it be better for us to refinance on a house that we might not be in long enough to recoup the lost equity or walk away with no debt and just spend the 2-5 years rebuilding our credit?

*I failed to mention that we have already been served and headed to foreclosure.

[HUD-1]

A few of your options inlcude:
1. Refinance and stay ther if you like the place. Eventually through amortization and eventually home price increases, you will be above water. This doesn't preclude you from later renting the place or attempting a short sale.
2. refinance and then rent the place out. taking on a landlord role isn't for everyone though.
3. Work out either a short sale or deed-in-lieu with the lender. You would want to make sure that they will not pursue a deficiency judgment!
4. Walk away and try to rent. Many landlords are checking credit reports which could be an issue for you. The lender may chase you for the deficiency and there are possible tax ramifications.