You are an a difficult situation. There are many things you will need to do right away. First off if you do purchase another property, yes they can attach it with a lien for whatever the balance is between what you owe and what they ultimately get whether a short sale or foreclosure. You would have to seek an attorneys advice how you could hold title to or if you could avoid a future lien such as in a realty trust. Next thing is you need tio get back on the phone with your bank. You need to ask for home retention, ask for a supervisor, you should be all done messing around with the people who could give a care. You need to lay it on the line with the supervisor, tell them you tried for a loan modification, it was rejected. ASK HER POINT BLANK what can you do for me to save my house? if she says nothing then tell her you would like to apply ofr a short sale immediately, ask her if you have time, ask her if they have set a sale date. If you have tome ask her to send you a short sale requirement package, dont let them mail it, there hgos another 2 weeksm, ask her to email or fax or then overhight. Find a real estate broker who specializes in short sale and can prove they have successfully completed them. list your house at once. A short sale is better than a foreclosure. NOW IF they say they cant do a loan mod or a short sale, ask them about a deed in lieu of foreclosure, ask them for a no recourse deal as you hav no assets or no ability to repay any shortages, best case they will forgiove the debt and you will receiv a 1099 from the irs and have to pay some taxes on this amount which is considered a gain. If they ask you to sign a note for the balance ... refuse!! but a deed in liue is better than a foreclosure. Ask her for cash for keys where they can pay you money to assist your move. usually $1500. AFTER YOU FIND OUT ALL THIS then again check to see if you can purchase in a realty trust and buy a home beofre it hits your credit report, tyou may want to contact a mortgage broker, not a bank and be up front with your problem. Good luck with all of your tasks, i do you wish you luck and will be thinking of you. Feel free to let me know how you make out.