You can try to sell your home via a short sale (provided you can prove financial hardship -- which most people can do these days). A short sale is when you owe more on the house than what you can sell it for. The bank needs to approve the sale, and agree to forgive the difference. It is a long and complicated process, but it is possible. But unfortunately, you won't be able to buy anything for 3 years. I would try for the loan mod.