First of is this you're primary residence? If this is your primary residence, then talk to your bank for a Modification so you can afford paying for the house, now if you can't do modification, then short sale the property, however, shortsale is treated as foreclosure by Fannie Mae, so if you sell your home, you will wait for another 3 years so you can get an FHA loan to purchase another home.
You might not like the situation but that is what is right. If you want to purchase another house, then you will require to put at least a minimum of 20%, plus, you should be able to afford both mortgages, the one you're buying plus your old home. And If you can do that and by all means buy another home, but as everybody is suggesting to you, don't just walk away from your old house.
Our advice is to consult an attorney and completely understand the implications of going the "foreclosure" route. Too many people are going in this direction without first accessing important information.
Our advice is, do your homework....then decide.