As part of the foreclosure process, you can probably participate in the Forclosure Fairness Mediation program- you should talk to an attorney or housing counselor about this. In addition, the initial foreclosure letter you received probably gave you the option to request a meeting with the lender. You might not have time left to respond to this initial letter, but if you can you should respond.
And it would probably be worthwhile to see an attorney and go over your financial situation in detail. You may have options that aren't obvious from your summary.
What most homeowners don't realize is that they have many options that are financially better for them than the options the bank gives them. You need to be very careful with deadlines for your responses, or you may be cut off from those rights.
I hope this helps get you started. A good foreclosure defense attorney can help you figure out what your options are in a short time frame.
This posting is for informational purposes only. It is not legal advice and does not establish an attorney-client relationship. <a title="Attorney Ryan A. Jacobsen" href="http://jacobsenlawoffice.com/about/">Ryan A. Jacobsen</a> | <a title="People | Property | Business" href="http://jacobsenlawoffice.com/">Jacobsen Law Office, P.S.</a><br /><b> <a title="People | Property | Business" href="http://jacobsenlawoffice.com/people/">People</a> | <a title="People | Property | Business" href="http://jacobsenlawoffice.com/property/">Property</a> | <a title="People | Property | Business" href="http://jacobsenlawoffice.com/business/">Business</a></b>