Here's the most honest statement you will read today: you have no case. It would have been worse if the lawyer advised you to reaffirm the second mortgage, because you would still be personally liable on the Promissory Note. You are actually in a position to do a short sale, with no exposure to being personally liable for anything post-sale on the 2nd mortgage. Also, the Second mortgage lender's losses on a short sale are not taxable to you ( again, assuming you did not reaffirm the loan). The only action you should take if you are a reasonable person is to send the lawyer who handled your case a Thank You card. ( let me know if you did that so I know Hell just froze over! )