trouble with foreclosure

[rissado]

We have owned our home for 5 yrs with a 7/1 arm. our house is falling apart around us and the city made our street one of the only streets coming into town. The road is so busy that we can't hardly get out of our driveway. We put our house on market but no one has even looked at it. Our current house has turned into the house from you know where. We have found our dream home on cul de sac and want to buy. If in the end, we buy the other without selling current and can't make both payments and no renters, we foreclose on the old home can they come after us for the difference (what we owe on the loan and the selling price after foreclosure)? Our loan is through wells fargo and we have mortgage insurance but the scary thing is that we bank through them also. What are they legally able to do to us or take from us. Could the mortgage insurance help us? I would like to know what could happen to us financially.