Is it illegal to foreclose on one home to buy another when the first won't sell for what you owe?

The answer is you owe what you owe on the house. If the bank can't get that amount selling it, you are still on the hook for the difference. If they foreclose on it, you don't own it anymore. Damaging it would be criminal and probably a felony. Additionally, if you make it worth less then the bank will get less and you will be stealing from yourself because you will still owe the difference. You should spend as much time figuring out how to pay your bills as you do trying to get out from paying them.