You can make Countrywide your long term partner.
Consider continuing to pay on your 1st, but not on the 2nd.

It is doubtful that that CW will foreclose on the 2nd as they will get nothing today. It will remain as a lien on your property, and it will affect your credit scores, but it will also cut your losses every month.

It will allow you hang on a bit longer while you decide what to do. If it ever goes back up, you will have to deal with them or whoever owns the loan at that time.

If the HELOC was maxed out for the sole purpose of acquiring/purchasing the property, it “should” also be non-recourse debt, as well as the first.

Consult a CPA for your sitaution.
Considering that $1000 a month could be going into your retirement account, you are throwing away a huge amount of future net worth.