Legal Question in Real Estate Law in Maryland

I have a Jumbo mortgage that is in foreclosure. The second mortgage was, according to the bank, sold to a third party. They have offered a settlement of about .35c on the dollar. That sound good but I am concerned of the legal pit falls if I do agree to it. IE; Can the bank come after me for the outstanding balance? How will the bank view the settlement? Is this some kind of ploy on behalf of the bank seeing that the house has been up for short sale for two years? Why would such an offer be made?


Asked on 11/15/11, 7:44 am

1 Answer from Attorneys
Robert Sher Wagshal and Sher

The holder of the second mortgage knows that with the first (jumbo) mortgagee foreclosing they will lose their security interest, so that is why they are willing to settle for 35c on the dollar. If you accept this you won't owe the second mortgage anything more, but you will still lose your property in the foreclosure. So the only incentive to settle with the second mortgage is to avoid them suing you personally for the outstanding balance. Since your credit rating is already severely impaired from the foreclosure, your settlement with them won't help much in that regard. You can avoid the personal claims by filing bankruptcy.

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Answered on 11/15/11, 8:43 am


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