Legal Question in Real Estate Law in Maryland

Re: Short Sale

Given your situation it's a good alternative. The lender is willing to do it because it avoids the cost and trouble of foreclosure. As for your credit standing, I suggest you check with one of the credit reporting services to see how they treat a short sale in terms of credit score. You would want the mortgage company to report a satisfied debt as a result of the short sale--see what their policy is on this. As for taxes, you're selling the house for what you owe, so if you lived there for at least 2 years your exemption as an owner occupant would cover any "gain" from the sale, although you'll probably end up with a loss.