Am I responsible for this? How will my credit affect my refinancing of my home?

i need some help. i own my own house with just me on the title/loan, and to help out a family member i purchased a home across the street and had my name as the grantor for 2 years. i moved my name from grantor to grantee. so, under the grantee it lists me and my family member. because my name and his are under the address across the street, i have never recieved any notice of him defaulting on the loan. the house is now foreclosed and the bank owns it, i just found this out! now, i am trying to refinance my house and am deathly afraid that i won't be able to lock in a rate due to this family member not paying the mortgage. a quit claim deed was signed by me as grantor and then moving myself and adding my family member to the grantee. me and this family member are listed as grantees. this family member lied to me and i had no idea that they were being served with foreclosure/default papers because i never saw them. this is supposed to be a family member and i am so upset that this has happened and never would have expected it. please, anyone with advice on how to handle this. i am afraid that the house that is all mine i could lose because if i can't refinance the arm that i am currently in will make me unable to make my payments! i need to refinance my property so i can lock in a rate. i myself have never been late on anything and feel betrayed by this family member. i could have helped financially if i was aware of this person having trouble making payments and then i maybe could have taken myself off of deed/title/mortage to save my credit. any help?