I never like saying this, but you may have no other recourse but to consult an Attorney:
If you walk away from it, you will bear all the bad things on your shoulders, (one way or another).
It is 20/20 hindsight to say that you picked the wrong Condo and the wrong HOA.
The only option that I can think of is renting it out for a while:
You can't have that much of a monthly payment,
And even if the rent doesn't cover your PITI, a few hundred would be worth it!
Please don't blame HUD, they are helping a lot of people and you can't blame them for the mess that someone has created. In fact, HUD may be your best path to another house or condo. Talk to a Realtor and Loan rep.
You may want to talk to a Mortgage guy now, to find out if you can get another place, (with this rented out) before your credit goes down the tube.A good guy that I respect a lot is; Shane Milne at; email@example.com He answers a lot of questions here on Trulia.
This is where I get up on a soapbox and tell everyone why I don't recommend Condos and actually HOA's in general. You've provided the evidence.
Good luck and may God bless