Legal Question in Real Estate Law in Arizona

Tell your new boss, where you are moving that you need a $60,000 sign-on bonus.

If you let the house go because you are upside down, your second lender will come after you for a deficiency judgment. A HELOC is generally not a purchase money mortgage and therefore is subject to collection on the note. If you can work out a short sale, the second lender may be willing to let the house sell for $104,000, take their $20,000, and allow you to make payments on the delinquent $60,000. If you are lucky you can negotiate the debt with them to pay less than the $60,000. You can also look into making Housing Affordable program to determine if there is any incentive that they would cough up to prevent the foreclosure and allow a short sale to go through.

Another solution would be to do what many people are doing with their homes. Rent it out and pay a management company to collect rents and respond to customer inquiries. Chances are this is going to cost you more monthly than the rents you will receive, but home prices are on the incline. If you feel home values in your area are going to increase, you may want to hang onto it for a while and sell when you're not upside down. The alternative is to allow the default deficiency judgment and declare bankruptcy protection thereby ruining your credit.

Best luck