Renegotiate loan / foreclose due to death in the family
So here is the situation:
In 2003 I co-signed on a loan with my mother to purchase a house (house#1)
In 2006 I purchased a home of my own (house#2)and began living there with two roommates.
In 2006 my mother was diagnosed with cancer
In early 2007 I moved into my mothers residence(house#1) to be the primary care provider. My roommates continued living at my old residence(house#2)
In late 2007 my mother died.
So now I have 2 mortgages and had intended to sell the house(#2) I had purchased. Unfortunately with the market as it is I owe about 70k more than it is worth. So now despite being "responsible" and putting 100k down on the house and getting a 30year fixed I'm stuck with a house I can barely afford to pay the mortgage on.
I wish to retain my mother's house(#1) as it is now my primary residence and another member of my family resides there as well. The lender for the house I purchased on my own(#2) has been fairly unresponsive to my questions so I need some answers.
If I foreclose on the house I purchased (house#2) can the lender go after my assets (House #1, Car, what's left of my 401k)? I have finally burned through enough of my savings that I cannot afford both mortgages anymore and renting the second house covers only about half the mortgage.