Can't sell home

[like2cre8]

Here's a little background on our situation:

Bought my house in PA in 2001, and for whatever reason, the loan ended up being in just my name only and wasn't joint with my wife.
Not a big deal I don't think.
Then the following year (2002) I lost my job and I personally filed for CH 7 BK in Nov 2002, it was discharged in March 2003.
Per my BK attorney's suggestion, I didn't reaffirm my mortgage with my lender (National City) but I continued to make the payments
and I still do. I have never refinanced this mortgage either.
Then in 06/07 my wife and I got a 2nd mortgage through HFC to pay off some misc debt (which I was surprised we could do since
the house was already included in the BK). And we have been making both 1st & 2nd mortgage payments on time, no problem.
Well I recently took a job out of state and we moved to MS in Dec 2007 and also put the house up for sale then too
(we are currently living in an apartment in MS with all of our belongings). And needless to say we have been unable to sell our house
and it has become a financial burden and we are at the point where we will no longer be able be able to pay for the home in PA.
We have thought about short sales, but we have no experience selling a home either and we are not sure what to do...

So my questions are:
I'm pretty sure I can just walk away from paying the first mortgage without too much of a hassle, except for maybe having a foreclosure
on my record. Is this true? And would I end up having to go through a foreclosure even though the house was included under my Ch. 7 Bankruptcy?
Would the foreclosure also be on my record in addition to the ch.7 BK?
What can our 2nd mortgage co. do once I quit making payments on the first mortgage?

Should I just continue to pay on the 2nd mortgage only or just quit paying that too? I am not sure what will happen once the 1st mortgage co.
takes action due to my non payment and eventually liquidates the house. I guess I just don't want to make the payments if I don't have to or, if
they will file some legal actions against us for stopping the payments on the first mortgage anyways.
We have been dropping the price of the house substantially and are getting to a point where even if we are able to sell the house, we would lose out.

Would appreciate any tips and info on what our options may be.

Thanks!

[Cramdown]

Have you thought about renting(add a disclaimer that when the house does sell, you will give the renters 30-60 days to move out) the house in PA? This may not help you out short term, but may be a little easier on your pockets.

[fltoo]

Are you sure the HFC loan is a home equity loan secured by your house?
Just asking because you state that the house in not in your wife's name, but the loan is in both names.

[like2cre8]

Well, I wish I would have considered renting earlier. It would have been the best thing to do considering our current circumstances. I guess it's not too late, but I would have to move fast on it.

And yes, the HFC loan is a mortgage loan that is in both of our names. And for some reason the first mortgage through National City is just in my name.
I was thinking that's why they put my wife's name on the second mortgage.

I'm going to look for my loan papers for the second mortgage (in a box due to moving) to get the details of the loan, but I just found a HUD-1 form that had all the settlement costs etc...

Any experience with a short sale? I'm thinking it would hurt me to do it, but not sure.

[fltoo]

Correct me if I am wrong, but it sounds as if you are just worried about ruining your wife's credit?

If your wife is not on the deed or loan, I don't understand how she could have gotten a loan on secured property that she does not own.

Anyway, call a really hot shot realtor and see if he/she will list the property and do the short sale. They will take care of everything for you.

[mamatyson74]

How about a lease with the option to buy? Thats how we are getting our house. A friend of mine cant afford her house payment since her husband left and she is moving out of state. She doesnt have time to wait for it to sell so we are moving in, paying the mortgage and we have a year to get our own mortgage on it.