One way to help yourself make a business decision is to ask yourself and try to answer the question what is more likely to come back first, your equity or your credit?
If you decide you are willing to walk, and can accept the possibility that you will lose the house in foreclosure, steel yourself, consider brinkmanship as the foreclosure process continues, and hold out till you cut a deal to reduce the payments to rental value. Your willingness to actually walk is what gives you the most leverage. As you note, your loans appear to be purchase money, and there should be no recourse against you if you decide to walk.
If you stopped paying on just the second, there would be nothing they could do other than harrass you with phone calls, and foreclose, which they obviously won’t. This might bring them to the table, or it might prolong the damage to your credit the longer the situation remains in limbo.
