I would say, for many vacation rentals, the break-even / loss statement is sadly not far off.

To look at the time of ALL of your rentals combined you need to make an election- and if you have prior losses tied up in the companies those would become tied up in the overall activity (IE if you sold ONE property from the grouping it's prior losses wouldn't be able to be deducted, where as normally they can be)Also the IRS is big on the log being regular and on going- meining you can't make it up after the fact. 

We kept our units full by slashing prices and jacking up long-term stay discounts, and while it still amounted to significant losses for us, we were able to weather the storm.Many hosts weren’t so fortunate, or simply didn’t see the value in fighting through.

They will make investments that are higher liquidity, higher income-generating, and with a disproportionately low potential for outsized losses. 

Things like a deed of trust to secure their note (otherwise the promissory note is completely unsecured), a lender's title policy, hazard insurance with them named as the lender/loss payee, etc. 

Is our only option to just take the loss and go to foreclosure?

If so, the title company should/would pay for the bond and name you or the bank as the insured.I agree with @ Catherine Emert and the title company may offer to indemnify you against loss and that might be ok if the title company's name is Chicago Title Insurance Company and not Mom and Pop Title Company.Either way, make sure you feel comfortable with your final decision because you should not take on any additional risk under these circumstances.Good luck.

Since you brought up weight-loss products, what is the reputation of such products that do not work as advertised (which is probably 100% of them) - awful lot of complaints and negative reviews.

I said if you do sue I would recoup all losses form the leak, never saw her again.Just wondering why are you not using a back ground check with a company.

The question is whether the gain from this sale would be considered passive income which could be offset by passive losses on other investments or is this considered portfolio income which cannot be offset by passive losses?