This has resulted in an unexpected financial burden of $7500.In light of these circumstances, I am seeking advice from you all on the legal options available to me.

Currently I only hold stock, options, and crypto as I am just starting out in my real estate journey

The option that I am entertaining is to purchase a multi-family that will cash flow enough so that altogether, the two properties cash flow positive.

In Metro Detroit there's a shortage of S8 rentals because:---Many owners are NOT willing to deal with the program paperwork headaches & tenants (why do you think many pro-tenant factions want to make it illegal for landlords to discriminate about source of income/S8?)

Both options have their merits, but with the market fluctuations and my unfamiliarity with the area's real estate landscape, I could use some insight. 

If you get a property for $15k at auction here in SFL and it's worth $250k, you just lost your money 99/100 times.A $55 title check goes a long way.Only options you have is to rent until bank kicks you out to try and recoup some investment, if it needs fixes don't put money into it, you will not get a penny back from anyone.

You're likely way ahead of the normal BPer in your W2 or source of income job to enter these markets, and I understand if you don't want to share.

Working with realtors for valuable market insight and contractors for scope of work might be a good option for you starting out if you don't have experienced flippers you can work alongside that know this stuff. 

My questions:- option #1: rent it out on a month to month basis until the bank forecloses with full disclosure to the tenant.

Every lender can be different but there are options that allow as little as 10% down and 100% of rehab financed.