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for the new loan on the new house. You have to sign documents at closing that nothing has changed from when you applied, and if you sign this after defaulting, that would be fraud, and you could suffer criminal as well as financial penalties.
If you are able to qualify for both loans at the same time, you can sign the new documents and walk away from the old mortgage. Your income would have to be large enough to cover both mortgage payments for you to even qualify, and you'd likely get a higher interest rate on the second loan (if you have that much income, you shouldn't be commiting credit fraud in the first place, though). But you'd already have the second loan, so you wouldn't have to worry about fraud (unless you lied on your credit app about income), or the ten year hit on your credit rating. Don't expect to get a loan on anything else for the next ten years, though.
Finally, if the bank forecloses (even if you mail them your keys, that's what's happening) and they sell the property for less than you owe, you will be responsible for the difference. What they can do to collect depends on the state. In Texas, if you have a homestead declaration on your house, then it can't be siezed to pay any debt other than the mortgage on the house. If it's not your homestead, they can sieze it through the courts to pay your debts. But that varies by state, and exactly how they can sieze your property and under what conditions varies.
It's a bad idea, if it's just a financial decision. It will ruin your credit for the next ten years, lead to possible siezure of all your property to pay any losses the bank suffers, and could result in legal penalties including time in jail if you are lying on your credit app. You'd do better to sell the property at a loss or lease it at a loss, or even hold it until values rise again.
As for the new home deposit, if you could find some way to negate that contract through their fault, you could get your money back. If you've got a real estate agent (and if you don't, why?) or an attorney, have them read the contract for ways out. Sometimes it is very simple--the sale is contingent on you getting credit, for instance, and since you can't sell your condo, you can't qualify for credit--some contracts are written so that this would allow you to break it with impunity. You may or may not lose ernest money, again depending on how the contracts are written.
But any advice you get here is a poor substitute for an attorney, so if you are really considering this option, contact one. Contracts are not all the same.
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