losing my @#$#@##@ big time

[acreage]

  OK heres the deal a few years ago i built a nice house out of pocket with friends and family on weekends and holidays i put a tremendous amount of work into the home it took a total of five years to build with holidays ,weekends,etc sacrificed.regardless after all said and done when we finished the house i owed some back taxes on my small business two cars that were partially paid for.so we (me and my wife)talked to a mortgage broker about a loan to pay off these debts and furnish this new house we were moving into (4200 sq ft) we were initially living in a 900 sq ft mobile home on the same property and had never owned a home.the taxes i owed were from a roofing business i owned from way back anyway since that was straightened out and payments were setup(with irs) we pursued this loan initially we were wanting to borrow @110,000 to cover the cars and taxes and furnishing after talking to the broker and running credit checks etc they told us we could get up to 270000 ive always filed taxes and income has always been in the high 20k granted im not thinking of the payments at this time and sign the papers. once at closing we are explained about the 2 yr arm etc and everything goes well.well 2 yrs go by and of course everyone is yelling payments are going to double etc if you dont lock in a fixed rate so once again we refinance into a fixed int. rate.by now i have two children two more financed cars and 327000 mortg. etc. a long story already i know anyway i have struggled to make the payments  for years now and now the last four to six months it has been very straining on our family in every aspect juggling car payments and house payments we have considered bankruptcy and yes it would help with credit cards etc but the house is just over whelmingly to big for us we dont even have time to maintenance it or enjoy it we live in a rural area and dont feel it will sell fast we own a small 1100 sq ft home in town and are moving into it out of necessity is there some way to fix this mess with out getting a deficiency judgemnet against the other proprty or can they take it from us we would prefer not to file bankuptcy. we do have some equity in the home  it app at 409000 not looking for any money just a fresh start without the other home being taken from us dont really know how a def judgment works any help would greatly appreciated

[BLL]

Have you talked to the lender?

[acreage]

I havent really talked to the lender directly i talked to someone with hud i saw something about a program called H.O.P.E. but after we went over finances he said there wasnt enough income leftover after expenses to go to the lender for a modification and said i needed to generate more income 2nd job etc.again these really arent options.i already work long hours and there isnt even time to take care of the home it sorta feels like living in a paradise prison i know these were my mistakes by taking out such large amounts on the home  but shouldnt some one like the lender know this was probably going to happen they did see my income tax returns and were probaly aware but knew the more they loaned the more they made i know it sounds like im playing blame games and thats not it at all. all this just happened so fast and i have no idea how to deal with it. im not trying to run from my problems but i just not sure how to fight this one once again any help would greatly be appreciated

[BLL]

Ask the lender for loan modification.
Find an investor to do a short sale.
Offer the property back to the bank as a deed in lieu of foreclosure.

Work harder.
Sell stuff.
Cut back on expenses.
Take in a roommate.

You have options. They just aren't very pleasant.

[acreage]

thanks so much for your help
I dont think the loan mod is going to be a real choice because even if i could afford the payments watching the house fall apart isnt any easier trust me i have sold stuff cut back expenses (i literaly eat a pb&j everyday for lunch and take a jug of water)and I just cant fathom taking in a roommate with having two young children so it seems maybe the short sale or deed in lieu of foreclosre would be options
in your opinion which would be the better (not necesarrily easier) to do or if you were the lender which would you rather happen im not trying to hold out for money or time just not familiar with the options.
when i talked to a bankruptcy atty it just seemed like one more person out for a buck sure he could save my older home but was ready to be in court in a matter of days thanks again for your help

[BLL]

I think a short sale might easier for you. The bank would get the property back with the deed in lieu foreclosure and then it would have to manage it until it could be sold. The short sale will get the bank some money and get the property off their books. Call the "We Buy Houses" people. They deal with people in your situation. Just don't expect to walk away with anything.