There are a few options for you but really think about your credit situation in the future. The question has been answered a few times in these posts but please give me a call if you would like to discuss this further. I'm very local to you and would be happy to help sort out all the information you have received in these posts.
Other than that, talk to your bank and or a real estate attorney specializing in short sales. Best of luck
I agree that a foreclosure will be the worst for you. If you get foreclosed on you will not be able to get another loan for years to come and therefore will not be able to buy another home; unless you buy it in 100% cash. The short sale route is the best option if your lender approves it, another would be, if you really dont want to live in that house anymore, renting it. Even with a short sale it would be difficult to get financing to get another home (unless you just want to rent for a few years). I've been involved in quite a few short sales and they are not fun but a much better option than a foreclosure; if you have any questions feel free to contact me,
Some alternatives to foreclosure: contact the lender and explain your thoughts, see about a modification, ask about a short sale. Try to think of different routes than foreclosure. Good luck to you.