Foreclosure is very bad on your credit report. You should do what you can to avoid it. If the bank forecloses you do not pay back the $70,000. However, if they sell the house for less than owed you may be liable for the difference, unless you have mortgage insurance.
You should note that any amount they forgive counts as income to you--you will owe taxes on that amount. Actually both are wrong. The credit score will drop anywhere from 50-200 pts depending on how much other debt you have. Additionally, each state has its own laws regarding paying back the difference. In Texas, you are responsible for the difference between what you owe and the fair market value. So if you owe 200K, the home is valued at 200K, and the bank sells for 190K, you do not owe anything. In some states, you might owe the 10K, but not all.