Regret to hear about your problem.
Check if you can add on to your house, builders are charging much less.
Next figure out what is the Max. rent you can get for your property, then figure out if you
can be cash flow positive.
Go to the blog below to see how your area is doing:
Later this year, there are programs underway, where the Bank will reduce the principal.
It maybe prudent for you to rent first your home and buy a 2nd home if you qualify; depending on the math about your monthly Loss or Profit after figuring out the equation (Rental Income + Depreciation - All costs).
If you used Turbo Tax to do your taxes plug in some numbers.
If you can afford to take a loss then so be it, if you cant try to rent, if you do a short sale first well, its unlikely a lender will lend you to upgrade your life style any time soon.
See if you can qualify for a FHA loan with 3.5% down on your 2nd. home and rent out the first and go from there.