If you have sufficient income, you may be able to qualify for your new loan and your current loans on your current home. And your current lender may be willing to negotiate your second if you offer up your new home as collateral for the existing balance on the note. My first question to you is, have you talked with your current lender about this possibility????? That would be the first step. Another hoop to jump through, is would there be enough equity in your new home to support the transfer of the collateral??? I would suggest consulting an attorney and a knowledgeable lender and a real estate agent. You should always have a posse of professionals in matters like this.
That loan is normally not transferred to the new home, as you don't own the new home yet.
A qualified realtor can help you in the negotiation throughout this process. But the first thing to do is to sell your first home, as a short sale if it's as you describe. My experience has been that a lender will not approve a loan on a new home, while your first home in unresolved.
Let me know if you need more details, or have any more questions.
The short answer is no, you cannot transfer the balance. However, you might be able to get the second to give you a promissory note.
If you need advice or a referral to a top Realtor in your area let me know.