DEAR BENNY: I am a retired teacher on a fixed income, with a home in California, a small 401(k) and an even smaller Roth IRA. I bought two very good new houses in 2005 with nothing down at a 10 percent market discount. I have a first loan and a second loan on each house. Since then, the rents have dropped dramatically and both houses are now empty.

This summer I will lose $12,000 on both houses, and renting them will add up to an $800 loss per month. I can no longer throw money away on these investments. If I go into foreclosure, what can happen to me besides my first-ever bad credit rating and an IRS bill for the difference in foreclosure price vs. loan amount? –V.K.

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