Walking away from mortgage? Read this
As personal finance columnist Eileen Ambrose notes, you could be setting yourself up for trouble down the road:
Indeed, in Maryland and the majority of states, walking away is no guarantee that mortgage debt won't come back to haunt you. These are so-called recourse states, where a lender can pursue you for any shortfall after it sells the house. So if you walk away from a $400,000 mortgage and the lender turns around and sells the house for $300,000, you can still be on the hook for $100,000.
The lender might not come calling to collect right away, but there's time -- generally three years afterward, and sometimes more.
The same is true of short sales, unless you negotiate with your lender not to come after you for the difference.
Do you have a debt forgiveness -- or lack of forgiveness -- tale?