Housing/mortgage question?

OK, so here's the deal. We own a condo, and, like everyone else, we got a home equity to pay off other bills etc, and now we owe $100k on it. There are 3 other units in our complex that are in forclosure or short sell going for I've heard, rediculously low prices of 65-75k. I am planning on going to law school in a year, and we were wanting to sell, but it looks like we might be under water, so what should we do? It was stupid to take out that much in home equity looking back now, but it is what it is at this point. My wife thinks we should just try and short sell and get a loan for the difference (we both have really good credit) but first of all we have never been late, so I doubt they would work with us, and secondly, with us having to move, how could we possibly get a loan to cover a 40k hole. The other option is renting it out, but then you have all the headaches involved with that living 8 hours away, and I doubt we could rent it out at enough to cover the payment and HOA. I said maybe we should think about just walking away. I will be going to law school and that's three years, so we probably won't be buying again for at least 5 years, we have no credit cards and no car debt, and we've been pretty smart up to this point, so this is not what I want to do, but I just don't know.
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I would not completely rule out the rent option, you could find a rental management company in your town to do all the day to day and they mail you a check every month. I think you will have to dip a little in your pocket, but it will stay yours and maybe sell when you graduate.
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You did Not say how many units are in your complex , just the number in foreclosure . When the vacancy gets high , the remaining people can't afford the total HOA bills and utility companies are starting to shut of power and water even though there are still paying occupants .

If the occupancy rate is still high , you will be much better off going through the rental headache than the other options which will have you in debt for decades . Seek out a property management company if the complex is still viable .

You may have to choose between law school now and waiting until your finances and the housing market are more in your favor .
The negative credit stays on for 7 years .

good luck

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You won't buy again for 5 years, but your foreclosure will remain on your credit report for 7 years.
I would pay down your home equity as much as you can comfortably. Then, in a year put the condo up for sale and see what you can get out of it. I think renting it out is a good idea. At least it may cover your payments - the HOA dues can't be that much money - not nearly as much as eating a $40000 hole. You can live 8 hours away and have someone manage the condo or have a family member help out in that?
You could get a personal loan in a year using the cars as collateral.

Just some ideas.