I have to vent here for a minute. A client of mine has a home she has not lived in for several years. Renters sometimes pay, sometimes don't, then they damage the house and there are repairs. Being a landlord seems glamorous but it isn't always.
So she is talking with another BROKER who says, just walk away, let it foreclose and declare bankruptcy and then you're done! Oh happy day!
BUT wait a minute here. First of all, if you are not a LAWYER, 
do not ever give advice to someone like this. This BROKER (who owns his own brokerage!) knows better, but he just gave out legal advice as if he were an attorney, which is illegal. That is called practicing law when you are not licensed to do so. I don't care how much you think you know, you are not an attorney!
Of course I have to preface the below with I am not an attorney so please contact an attorney for legal advice concerning the below. It's important to know what all of your options are.
The reason this is such a problem is the potential ramifications that this broker doesn't seem to care about or maybe hasn't thought through (remember, he's not an attorney!). My client does not have credit issues now and the only problem is this house has become a noose around her neck. The bank does not want you to walk away and there are ramifications.
Maryland is a recourse state which means if you walk away and the bank forecloses, then they sell, if they sell for less than what you owe, there will be a "deficiency", which you are on the hook to pay back to the bank. Now filing bankruptcy will allow you to bankrupt that deficiency, IF you are approved for a bankruptcy. If you are approved for a Chapter 7, that wipes away everything. If you do not and qualify for a Chapter 13, that means you have to pay some of it back. You don't just get approved to file bankruptcy because you feel like it; you have to qualify. What if she were to walk away, the house forecloses, she gets smacked with that deficiency, then doesn't qualify for a bankruptcy??? Then is stuck paying the deficiency??? I'm guessing she could sue the Realtor for giving her bad legal advice, but..... he's not an attorney... so should you take legal advice from someone that is not an attorney.....
So let's say you do what the Realtor advised you to, then you have a foreclosure on your formerly pristine credit report and then a bankruptcy. They stay on your credit report for 7 and 10 years respectively. Then your car gets totataled and you need a new one. Wonder what your interest rate will be on that? 18%? A foreclosure and bankruptcy are gifts that keep on giving for years to come.
The better option for almost everyone is a SHORT SALE. In a short sale, you work with a real attorney and they are the middleman between you and the bank and they negotiate on your behalf to have the bank accept an offer for the home and waive the deficiency so you don't have to pay it back.
In MOST cases, the bank will forgive you for the deficiency and sometimes they even PAY YOU to move out and keep the house in good shape! This is an asset for them that they want sold, they do not want it back, and they are getting better and better with the short sale process so they don't have to foreclose.
Please, please do yourself a favor and do not walk away from your house. Call us today and we'll go through the process with you and refer you to the attorney we use to facilitate this process. We advertise and market your house as we do regular sales, find the buyer, work with you and the attorney and the buyer's agent to get you to settlement. Heck the BANK PAYS OUR FEE too - it literally 95% of the time costs you NOTHING to get yourself out from under the house.
And Realtors - DO NOT GIVE LEGAL ADVICE! Consumers - If your Realtor starts giving you legal advice, plug your ears with your fingers and start making noise so you can't hear it!
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