Regardless, although the foreclosure or short sale won't hurt your credit because you're not on the loan, if the other person you own the house with loses it to foreclosure, the house will be gone. All of it, not just half. The mortgage is a lien on the property and if it doesn't get paid, the bank will take it back. I wish I had better news.
Let me know if I can help you with the short sale. I do a lot of them.
Rosen & Company West
First Weber Group
Certified Distressed Property Expert