Legal Question in Credit and Debt Law in Maryland

I sold a business property about six years ago and held the mortgage. The buyer stop paying rent and property insurance a number of months ago, and then a fire broke out. Arson is suspected. The property owner changed insurance policies and did not list me as co-beneficiary as the mortgage contract required, so he is collecting and pocketing the insurance settlement.

We are now foreclosing the property and expect that the auction will fetch a price less than the equity on the mortgage. The principal is about $350k and we are planning on placing bid of $200k, which will almost certainly be the highest.

Question - can we sue this guy for the uncovered debt on the mortgage + property taxes that I paid on his behalf? What are the recourses and chances of success?


Asked on 1/06/11, 9:44 am

1 Answer from Attorneys
Phillip M. Cook Cook Legal Services, LLC

You MUST hire a Maryland real estate attorney to handle the foreclosure process for you. You can likely recover for the "deficiency" between the mortgage and the foreclosure price as well as property taxes. HOWEVER, a very specific process must be followed, and certain things must be done PRIOR to foreclosing the property, so you should not try to do this on your own. It will be worth the couple thousand in legal fees.

Best of luck.

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Answered on 1/11/11, 10:01 am


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