Possible Foreclosure with 2 Mortgages

Hello,

I bought a house in Feb 2007 for $104,500. (I have 2 mortgages, one for about $83,000 and the other for about $20,000). I didn't know much about buying a home and I think I may be a victim of mortgage fraud. At the time of purchase, my house was in need of repairs and assessed at about $53,000. I've tried to repair the house, but it is just too much for me financially (and I've even have a part-time job in addition to a good full-time job)...to the point that my credit is terrible. I'm thinking about letting it go into foreclosure, and since my credit is already bad I don't see it getting much worse. Is this the right way to handle this, or what good can come from pursuing a "mortgage fraud" case in court? Could my mortgage be erased/reversed? What happens with a foreclosure when there are 2 mortgages involved? What options do I have because I don't know what else to do and foreclosure seems to be my only option...

Please help!! I would greatly appreciate any advice that you would have to offer me.

How in the world did you get a loan for 80+ when the house was only worth 53??? Did you have a constuction loan? What part of your loan process do you think was fraudulent? You obtained the first and second mortgages at the same time to buy the house with no money down, right? That is not illegal---I suspect you are also paying several hundred dollars a month in mortgage insurance premiums because the loan to value ratio in the house is so bad.

You had to have an appraisal done (if a bank loaned you money). How did you buy a house that wasn't worth the asking price? In other words, if it appraises for fifty thousand, the bank won't loan you MORE than it is worth. How did you get overmortgaged? Was your mortgage sold after you moved into the house? or is it with the same lender?