Foreclosure preparations

In NC, if property is foreclosed upon and if, at the foreclosure sale, it goes for less than the amount remaining on the loan, the lender may go after the homeowner for the remaining balance after applying the sale proceeds, called the deficiency. Therefore, if you are underwater on one or both homes, if you're underwater by enough to make it worthwhile for a bank to go after you, expect that there's a good chance they will. You may need to be prepared to pay the defiency or deal with a lawsuit.

Also, a foreclosure will seriously damage you credit rating. It will likely make getting credit more difficult. If you anticipate needing credit, try to take it out (open up LoCs, get credit cards, etc.) prior to the foreclosures.

Finally, if you have any existing LoCs or other credit, check the fine print--sometimes, they automatically come due to in full in the event of a default on any other loans, and foreclosure is a default.