Refinancing with a subprime mortgage just before home prices plummeted left Isaac and Tracy Herndon owing more than their house is worth. Now they're trying to sell it. <b>As told to Jessica L. Anderson</b> November 1, 2008 You're a loan officer. How did this happen? I was working with a subprime lender and seeing people take out 100% loans and pay off all their debt. I believed I was helping people. I believed in it so much that I thought we could do it for ourselves.How much did you borrow? Our home was appraised at $190,000 and we owed $125,000, so we refinanced and took $60,000 in cash. We paid off our credit cards and car loans and put $20,000 into the house. RELATED LINKS Recent 'My Story' Profiles Complete 2007 'My Story' Collection How did you get so deep in the hole? Our monthly payment jumped from $900 to $1,600, and when the mortgage business started heading south, I wasn't making enough money to cover it. We blew through our savings. My wife and I were working four jobs at one point and we couldn't keep up. When did you decide to bail? We tried mortgage modification and looked into refinancing with a Federal Housing Administration loan, but didn't have the income to qualify. Our first 30-day late payment was three months ago, and we decided that's it. The last estimate we got was $20,000 under what we owed. Advertisement What's your plan now? We're giving up our home and starting over. To avoid foreclosure, we're negotiating with the lender to do a short sale, which means the lender agrees to accept less than we owe. Do you think you can sell your home? We're looking to list it for $163,000, about 4% below the market value. It's a cute three-bedroom house -- we should get an offer pretty quickly. Will this sink your credit rating? Right now I'm in forbearance status. If I can keep it from foreclosure status, I could rebuild my credit in a year or so. Tracy was on the original mortgage but not the refinanced one, so her credit should be fine. Where will you live? Tracy is the manager for an apartment complex, and we'll be moving into the apartment attached to her office. That will save us more than $1,400 a month in expenses. We're not going to own a home for at least three years, and when we do we'll know better. I leveraged everything we had -- I wouldn't do it again.