I want them to take my home so I can move on

Background: After 8 months of unemployment in Atlanta (2001), I ended up taking a job in Detroit metro and purchased a house in Southfield. In 2004, my employer transferred me to Virginia for a promotional opportunity. After 3 years on the market, I've only had two offers on the house. The first one fell through when the buyer got laid off. The second offer was contingent of the sale of their house, which is still on the market.

Today, I've got a renter that doesn't even cover half of the mortgage payment with CitiMortgage. With all of the foreclosures in Detroit, the value of the house is now "much less" than my mortgage balance. I purchased the house for $190k, spent nearly $40k in a new kitchen and other upgrades, and trying to sell it at a break even of $160k. I owe $148k, but comparable homes that need a lot of work are going for $90k to $119k.

My primary residence here in Virginia is an ARM, which resets in September. I want to refinance to a fixed rate, but everytime I try to pre-qualify, I'm denied because the house in Michigan tips my Debt-to-Income ratio to undesirable levels. I found a bank that was willing to give me an acceptable rate, but their Underwriter said No.

I'm stuck in a bad situation. I've tried to contact CitiMortgage, and all they will do is send me the Short Sale form. Before I can qualify for hardship status, I have to be late on my payment. That will trash my credit score and any hope of getting a refinance on my primary residence.

I'm willing to work with the banks, but as of now CitiMortgage wants me to essentially go into foreclosure on the Michigan hosue, which in turn will most likely end in a foreclosure on my Virginia home. Everything is current, and I've spent the last 22 months trying to rebuild my credit score to back over 680.

Help!

I have my mortgage with Countrywide.
I have been trying to deal with their Work Ir Out Program since Nov. 2007 I called yesterday and was told by customer service Rep that they could not help me because they hadn't heard from me. but anytime you call you never can get the person who is supposingly trying to work It Out.
I am in Option Arm nightmare, I can only pay the minimum payment and my balance has gone up from 340,000.00 to 366,000.00 due to the fact I had a lying cheating mortgage broker that I thought was trust worthy. I am in a real pickle and Countrywide Work It Out Program, I don't think is working out anything with anyone. I am not late on my payments, but I was told that my payment was going up to 2600.00 I will not be late then either I just won't be able to pay it.