Underwater in Maryland

[mrack]

i posted this today at the end of another thread, but I'm not sure if anyone will read it, as that thread dealt with Washington State specifically.

Originally Posted by TomEason

@dynomutt

@All other interested WA members

Although I'm no expert on WA FC and mortgage law, here's my take on the situation.

FWIW, please know that lenders never use judicial FC for small residential loans in your state. They always use a TS.

The question here is whether a secured junior lender can legally sue the borrower before, and in lieu of, foreclosing.

To my knowledge, only two of the 50 states that legally allow a secured junior lender to sue the borrower, FL and MD....

It looks like I will be sued if I stop paying on my 2nd mortgage.

Situation-
1st mortgage w/ Wells Fargo-$146000 @ 6%
2nd mortgage w/ Wells Fargo, N.A.-$50000 @ 5.88% (HELOC used for purchase money)
Both notes are interest only, 7 year ARM, scheduled to reset 3/2014

My wife and I bought a townhouse in Maryland, and paid $196000 in March 2007 .We intended to stay for a few years and move up into a single family, but obviously that hasn't worked out too well. Currently, the value of the home is around $140-145k, so the 2nd mortgage is underwater. I have begun looking into a refi, using HARP 2.0 for the 1st mortgage, to take advantage of low rates and get out of the interest only ARM. After researching this site and others, I was contemplating a strategic default on the 2nd, but now that may not be an option after reading TomEason's post. We would like to move, but are not interested in walking away from the house. I can make both payments now, but most likely will be very hard pressed once the notes reset. I wanted to refi with other than Wells Fargo on the 1st, to get some separation from them if we go ahead with the strategic default, but now it seems like it doesn't matter. I have not spoken to an attorney yet, just doing research. Any thoughts, comments, would be appreciated, especially from Maryland homeowners who have experienced the same type of situation.

[illstay]

I know that Sailor Dude got sued by his 2nd. You should try searching for his posts. I have a 2nd in MD also. So far mine hasn't sued but I won't be surprised if they do if we don't work out something. I'm a few weeks shy of 12 months with no payments. Google Maryland judiciary case search, put in your lenders name and see how often they sue in mortgage cases. Mine sued about 4 times in the last two years

[mrack]

Thanks for the response illstay. I'll check for those other posts by Sailor Dude and the case search. Has your lender been interested in any type of settlement with you? I am wondering what the pattern is in MD- are lenders more likely to settle or sue.