I am in southern California and I have gotten my family into a real mess.

We bought a home for 600k in scripps ranch and converted our previous home in chula vista CA into an investment property.

The rental from the investment property just about covers the PITI on the its 30yr fixed mortgage of $300k.

Now we are worried about our primary residence as it is likely to sell for around 400k-450k in this real estate correction ( still smaller and costlier than my previous propery! What a crazy mess! )

I am reading a lot of gloomy forecast for our economy and am worried about being able to keep my job. I can weather this out if I maintain my current income.

In the worst case scenario where I get laid-off and also get foreclosed on my residence, can the lender come after my savings and 401k and investment property and seize it - leaving me with no residence?

I have begun losing sleep over this nightmare scenario. For what ever its worth I have perfect credit ~800 now...

Interesting life!
netlook

I believe, under recent laws passed to protect people due to the mortgage crisis, they would not be able to go after you for any shortfall in the value due to foreclosure.

The current market value of your residence has no bearing unless you need to sell or it is subject to foreclosure.