Easy Home Equity Loan

OK, so please read this clarification if you are going to answer (because I can already anticipate the answers and it will not be what I’m looking for if you don’t read this). This is not a 401K loan I am talking about that you get from through your employer (so please don’t go down that path). Also please don’t suggest a home equity loan (the equity in our home is too low for that). I am talking about going through some type of financial institute and having them give me a loan using the IRA as collateral (and obviously taking into consideration the income we are bringing in and credit rating). I am simply trying to find a way to eliminate some credit card debt at a lower interest rate. If that’s not achievable then I will just keep paying off the cards as I am, by making additional payments on each. Thanks in advance.
Thanks for the quick responses guys. I should have also mentioned I was not looking to take a distribution and pay the tax penalties, but the initial answers seem to be on track with what I was thinking.
One of the reason I love Yahoo answers is that I can use the info provided by responders and then use that to google more info. I just googled tax violations thanks to the first answer and this is what I found (which sounds like it’s my solution)….

1
Call the 401k plan administrator for the company you currently work for. Ask whether it will allow you to roll you IRA into the 401k. While this is not the typical rollover discussed in a financial forum, the IRS does allow this and most administrators will agree. Request any paperwork you need from your plan administrator.

2
Call your IRA administrator and request a distribution form. An IRA rollover–regardless of what direction it is moving in–takes a distribution of assets from one account and has 60 days from the date of liquidation to return the assets in kind (cash) into another qualified plan–in this case your 401k.

3
Fill out all paperwork obtained, sign it and submit.

4
Deposit the IRA distribution check into your 401k p

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2 days ago I got a letter from Aurora Loan Services, they are offering me to pay about half of my second mortgage loan and saying that, if I do it, "my loan will be considered payed in full". I have to do it within 30 days and the payment has to be done in the form of a cashier check or money order. They also say they will give me an IRS 1099-C form for the amount forgiven.

I have never been late in a payment but I have a terrible loan, I don’t trust my bank (just google Aurora Loan Services and you will see why) and I was considering refinancing soon (it might not be possible as my loan is higher than what my house is appraised for).

Some details about the offer and the loan:

First Loan:
9,000 30 years (5 years interest only)
6.5% APR for the first 5 year, then it will go up

Second Loan:
,000 30 years fixed
13% APR
***offered to pay only ,000 to pay it off***

My loans total: 4,000
My house is now worth: 0,000 to 0,000

I called them today and they said there was no more information I could get, just the letter, in which there isn’t a lot of fine print, pretty much all it says is what I state here. They were kind but not helpful.

Should I take the offer? Will this inflate my income and kill me at taxes time? What questions should I be asking? Is it as good as it seems?

Professional advice is very welcome.

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I was given a second as a promissory note that I recorded on my house sale. When I google-earthed it, the house looked empty but could not see a for sale sign. Getting worried.

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