Legal Question in Real Estate Law in California

See a bankruptcy attorney in your locality to see if you qualify for a Chapter 13 filing. Under an approved Chapter 13 plan the court can write down the principal and interest on the rental property, thereby lowering your payments on the rental property. (but not your primary residence).

Also, talk to your first lender about refinancing and rolling the two existing loans into a single new loan. This may not be possible as you may not meet all their criteria, but as an alternative to bankruptcy should not be overlooked.

I suggest a refinance as pointed out by Mr. Whipple. Without you providing us more detail, a definitive legal answer cannot be given.