Name on Deed But not on Loan foreclosure

My grandfather bought a piece of property about 5 years ago that I have made all of the payments on. He is recently deceased and the Bank advised me to continue making the payments for now. Though the note is set-up on a balloon. They originally told me that the loan was going to be assumable. But now that it is time to do the paperwork they are wanting to start all over again with a new mortgage in my name. First let me mention upon his passing my home went into probate. My mother was the beneficiary and I paid the $$$ to the lawyer to have the deed written in my name and my mothers. I no longer live at this property but I am trying to keep it.

After the cash I have paid on the orginal closing. The lawyer cost and the NEW closing cost, the property just isn't worth it anymore. Bank lady said they would just foreclose if I didn't want to take that offer.

So my question is this. Will foreclosure affect me or my mother since we are the 2 names that are on the deed? Though neither of us are on the bank loan.