This is called considered "buy and bail" by mortgage companies. You must be able to qualify for a new loan showing that you can support two mortgages without any rental income from your current home. If you can not you will not be approved for the loan on the foreclosure. If you have 20G in equity why not attempt to sell first? You may be able to work with a limited service brokerage and at least break even on the sale of your home, keeping your credit intact so that you can move to a less expensive property.
As other agents have said your credit will be ruined for 7 years, the mortgage company could make an attempt to attach a lien to your new home (though doubtful) and certainly you should consult an attorney to see what other issues might arise.
If I have misunderstood your question I would be glad to revise my answer in the future.
Have your consider selling your home? Leasing home? Lease Purchase?
Appears you can pay cash for a home however a foreclosure can effect your credit for approx. 7 years. If you apply for any type of credit during 7 years either declined or interest rates would be high.
Dallas Realtor and Consultant, Mortgage Loan Officer, Lecturer regarding Credit Repair
â€“ Lynn A. Crosby