Foreclosure is always an option though it should be one of your last. You have several options you should discuss with your bank: Loan Modification, where they would use government provided money to assist re-adjusting your mortgage to make it more affordable to you, Deed in lieu of foreclosure, short sale which sounds unlikely given the situation of your neighborhood (though it's worth a shot), and then foreclosure. Talk to your bank and their "loss mitigation" department and discuss your options. Foreclosure should be your last resort and if it comes to that you don't need to do anything, just stop paying your mortgage and the bank will take care of the rest.
from the sounds of it yes you would qualify... Depending on the type of property you are looking to buy you may qualify for a conventional... talk to a mortgage broker and weigh your options. For FHA you sound A OK.
If you are going through bankruptcy, there is no reason to do a foreclosure or a short sale. the bankruptcy will trump everything.
Most likely the answer is "no." However if the home is foreclosed upon you will be forced to vacate. Always check your situation with an attorney if you're having doubts because of something that you may have left out of the question.
EUZ -Very odd indeed. Surfed Homepath.com and could find nothing about "cash only" offers. From past experiences it has been a program that encouraged the purchase of distressed homes by allowing, for a small fee and higher rates, the buyer to purchase homes without an appraisal, which is like the Sword of Damocles for this type of property. You should call the help line and see. There may be someone in the middle giving bad or false advise. If all else fails, you should be able to go directly through the site to make your purchase. Hopefully you are using an agent who has worked with Home Path before.
Some common things to look out for:Mold in the basement indicating water accumulationMold on the ceilings indicating leaks in the roof or sidewalls or a burst pipe in many cases (depending on where you are... this is common in the cold Midwest)TermitesCode violationsSquattersLow appraisal value preventing your ability to get a loan of any denominationCompletely unhelpful REO Broker "support" staffLast but not least HUGE wait times.In short, it is best to work with a buyer's agent who can help guide you through the process of acquiring REO properties, it will save you money and most importantly LOTS of time.Good luck!
This link looks unassuming, but it is actually VERY informative! It has 4 min's of content that explains some back alley dealings regarding short sales and the banks who are actually PROFITING from them. Hats off to these guys for exposing this shadiness in an informative and easy to understand way.
Jecates -There is an excellent article here: http://www.thechicago77.com/2010/02/the-short-sale-process-part-1-how-to-hit-a-bulls-eye-while-blind-folded/ That will give you an in depth understanding about the navigating the Short Sale process. An excellent read!
That is a very gray-area question and the answer will be based on some answers you did not give. In this case it is advisable to contact the irs. You can visit their website for contact information irs.gov ... Since you never lived there and never claimed it as your primary residence you may have a shot. If you never owned a house besides that you may be able to paint the picture that it was an investment property. Your best bet is to speak to a tax pro or the IRS. Good luck.
Bidding on a foreclosure is the same process as bidding on a typical sale. There are quite a few ways to waste time and money however and as such it is highly recommended that you find yourself a buyer's agent who is experienced in the process of buying one. The bank pays the agents commission so you really have everything to gain and nothing to lose. Good luck!