What is the most appropriate solution for me if I was swindled into buying a house I cannot afford?

When you say "swindled," do you mean the person who helped you buy the home actually lied, hid important facts, falsified paperwork, etc.? If they did, you may be able to bring a fraud lawsuit against him or her, and in that lawsuit, you could look for fairly substantial damages. You also may be able to "void," or cancel, the contract of sale.

However, the important thing is, for there to be fraud case, there must have been actual *fraud*--deceit or lies, which were made knowingly and with the intention that you would rely and act on them. Furthermore, to avoid potential legal trouble yourself and have the best chance of getting out from under the contract, you'd need to be an innocent--in other words, if you signed your name to fraudulent paperwork, say, which overstated your income or assets to get a mortgage, then you participated in the fraud.

If there was no fraud--if they helped you get a house you shouldn't, but there were no lies, deceit, or trickery--then you're stuck with the home, the taxes, and the mortgage. There is no legal obligation to make sure that people only buy what they can afford; the assumption is that the purchaser is looking out for his or her own interests. So if there's no fraud, even if it was an awful idea for you to buy the home, you cannot escape the contract.

In that case, then you should first try to work something out with the lender. Banks do NOT want to foreclose--they have too many foreclosed properties as it is. You have a good chance of being able to negotiated lower payments, a reduction in the principal (the amount owed), or some other change that will help you stay in the house.

Another option is to work with the bank to get them to approve a short sale. (I'm assuming you can't simply sell the house for what you bought it for, or else you'd be doing that.) In a short sale, the bank allows you to sell the house for less than the mortgage and agrees to take the proceeds of the sale as payment in full. Again, banks don't want to foreclose, and this gets them most of what they're owed at least. If you can sell short, you increase your chance of being able to sell.

If you can't workout your mortgage, you can't shortsell, and you can't prove that you were defrauded, then declaring bankruptcy may be your best option. It will hurt your credit rating, but will get you out from under debts--though you will have to pay court costs and attorney fees.