Foreclosure on a Construction Loan

[tlvrn1]

My question involves a foreclosure in the State of: Ky

I dont know what to do! We were approved for a construction loan on plans for a 400,000 home. Told we had 320,000 to build so we did. When we went to convert the construction loan to a mortgage was told the house would not appraise for 400,000 would only appraise for 365,000 by the broker that the bank that approved the construction loan told us to use because we are sub prime borrowers.So now almost a year later after we borrowed,begged and sold what we could to pay the difference again the broker states the now the house will only appraise for 350,000! So not only can we not pay the original loan for the construction of the house we also dont have enough to pay the builder and he placed a lein on the house.We can afford to pay the payment but cant get a loan to close so our construction loan is now going into forclosure. I recieved the papers from the sheriff yesterday that we have 20 days to respond. I guess my question is what should I do. I have no credit cards, no debt except for one car payment and I own a lake house, 5 cars all paid for, and a boat. Three children all to start college in the next few years. I am disgusted and worn out over this whole process. Why am I to take the whole brunt of the failing economy and housing market. I went o school I educated myself and my family, I paid my taxes what can I do.....desperate, scared confused.

[Mr. Knowitall]

Your shortfall is what? $15,000? Less?

Think creatively. For example, see if you can find somebody to lend you the difference. Or talk to the builder who is threatening foreclosure - maybe he'll agree to lift the lien so you can refinance and pay the bulk of what you owe, then file a second mortgage in the amount of the remaining balance. You're not responsible for falling housing prices, but neither are the other parties involved.