Many banks are happy to work a short sale with you. We have had several short sales in our area recently and it works in everyone's best interest. The bank will let you sell the property for less then you owe. They write off the loss but you don't get penalized with the loss (it doesn't get counted as income). The reason that this is good for the bank is that they don't have to go through the foreclosure process which initially will cost them $30K-$40K just to get the process started.
Talk to you bank/mortgage company and see if they will work with you.
Are you paying a mortgage on the property you are currently living in? Would it make more sense for you to live in the condo?
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