Few options when $350K underwater

Home Sale Hindsight

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Q: Several years ago, my in-laws approached my then-husband and I with a real estate business proposal. (They owned a mortgage company.) We could buy the home of one of their clients, who was struggling financially, and let the owner lease it back from us for a few years until she was back on her feet and would buy it back from us under a lease-option agreement. We would get the tax write-offs and $10,000 from the sale, the owner/tenant would get her bills paid off from the sale, and we'd basically have to do virtually nothing. We agreed to do the deal, but we did it in my name only. Now, I'm divorced, and the property has depreciated drastically -- we paid $500,000 for it, and it's now worth only about $150,000. The former owner is still there, but has no down payment saved up, which is now required to get a loan. Also, there's no way she can get a mortgage for anywhere near what it would take to pay my mortgage on the place off, and the payment is adjusting beyond her or ...