DEAR BENNY: My wife and I purchased a four-unit rental property for $935,000 in 2006 and put 10 percent down. The lender split our loan into 80/20 and we have a loan balance of $650,000 and a HELOC balance of $192,000. We have an ARM payment on our first mortgage and our monthly mortgage increases annually. It’s now getting to a point where we can’t pay anymore.

Currently, the property value is $625,000, so we pretty much are upside down. The bank doesn’t want to adjust our loan because it is a rental property and they won’t refinance. We also have a problem with a tenant who could not pay rent because she lost her job, and it is hard to find tenants due to the economic downturn. I would like your honest advice on what I should do. Should I just walk away? –Julius

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