Forced to Foreclose?

Just when I think things couldn't get any worse with the condo I get this terrible letter on Tuesday morning.  I had a lump in my throat all day because of it and am only just now starting to feel a little bit less anxious.   It basically said that I needed to show proof that I still live in my rental property or else they will be demanding payment in full.  I've learned from the Internet that if I can't pay it (which I can't of course) then they will stop taking my payments and I will be foreclosed upon.  I either have to move back into the property or if I don't they want me to pay off the entire mortgage.  Apparently there is a stupid clause in my loan agreement that stipulates that I must live in the property for the life of the loan no matter what. They don't even care that they are getting money from me every month.  If I don't live there anymore then I am in default and they no longer want my money unless it's paid in full.  What kind of craziness is that?  OK I signed the contract.  It's my fault for not knowing what I was signing but I don't think a loan of that sort should ever be offered under any circumstances.  They basically want me to live in a studio forever.  Well that's not possible and if they won't take my monthly payments anymore I'm going to have to foreclose.  I don't see any other option.  I can't sell it because I owe about 100K more then it's worth.  Plus, who in their right mind would want it?  Aside from me.  Stupid, stupid!!!  Even if found someone that wanted it there are all kinds of special rules about who is eligible to even purchase.  I actually owe more on the mortgage now then when I took it out 6 years ago because I have three silent loans that were used for down payment that accrue interest but that I don't pay on.  Between a loan that goes up not down after 6 years of payments, the tanking housing market and the fact that it's an incredibly tiny studio that takes about a minute to grow out of  in a bad neighborhood I basically feel like I was set up for failure.  

I've been scouring websites for the last two days trying to learn more about the ramifications I face if I do this.  I'm learning all kinds of fun words like non-recourse purchase money and deficiency judgment.  I already know my perfect credit will be trashed for about the next 7-10 years but aside from that my biggest concern at the moment is if I will owe taxes on the difference between what I owe and what the lender can sell it off for.  I already know they can't take my house and that chances are they won't file a lawsuit against me for the difference.  I've been taking notes and google searching like crazy to find as much info as I can.  I used my job's EAP program to chat with an attorney for 20 minutes yesterday and he says I should be OK tax wise and be able to just walk away with just the credit hit but I just want to make sure I do all my research before I make a decision.  This might be the only way to EVER get out from under this condo that has basically been bankrupting me anyways so I am a little relieved that I'm being forced into it but on the other hand I'm sad about my credit and scared about what happens after.  I am responsible and have always made good decisions so it's really hard to believe that I am in this situation and it sucks.  I'll make a decision by the end of the month.  Then, I will have to let my renter who is also my friend know what's going on at some point.  A foreclosure will probably take at least 6 months and even after that she's protected to where she can stay for the lease.  Often the lender will try to buy out the tenant by offering cash so they will move early though.

Of course this happens while hubby is away.  Him being out of the country we don't even get to talk.  We are down to e mails.  The time difference is so big that when I'm in bed he's getting off of work.  I'm off to a work conference where we will undoubtedly be pumped with food constantly and that will probably be boring but at least it gets me out of the office which must be infinitely more boring at the moment.  I am glad I had all the free time to do all my foreclosure research.  Weight wise I'm down to 111.5 despite my club crackers and peanut butter craving that I could not fight last night.  I'd only eaten two wrap rounds for dinner so I was still really hungry.  Interestingly enough my two scales are matching again.  I Still don't know what's up with that in the first place.  The one that I'd been using (that goes to 10ths) just randomly went high all of a sudden but now it seems to be matching the one I switched back to when I couldn't trust it anymore.  It still usually reads whatever I weighed last, then I have to put half my weight on to mix it up then do it again for the real number.  Whatever.