This looks like it could be a big mess for you and so I would definitely speak to an AZ real estate attorney. I believe AZ can opt into a judicial foreclosure and even if they don't come after you for a deficiency they will most definitely 1099 for the deficiency amount. You should talk to an AZ Realtor about a short sale and see if they can decrease the deficiency amount and you might have to sign an unsecured loan for the difference. Obviously it's a mess but speak to the proper professionals, live on a tight budget, and start to negotiate w/ the lenders.
Mario Villagran, MBA, Realtor