Legal Question in Real Estate Law in Maryland

Re: foreclosure

You could be found liable for fraudulently obtaining the refi, depending on the accuracy of the representations made in the loan application, which would render any deficiency on the foreclosure non-dischargeable. DO NOT try to file bankruptcy without a lawyer.

Re: foreclosure

If you have concluded that you will lose the house, it would be worth your while to contact the lender and offer them a deed in lieu of foreclosure. In other words, you would agree to deed the property over to them voluntarily in exchange for a complete release of any personal liability on your behalf. This can work for both parties--the lender avoids the costly and time consuming process of foreclosure, and you avoid having a foreclosure on your credit record, as well as the potential of a deficiency claim if the property is worth significantly less than the amount you owe. Perhaps you will even avoid bankruptcy.