If you don't need the credit (which you don't), I'd walk away now that you're secure with cars/new house.
As long as MD isn't a recourse state.
A few comments: none of this is advice for you, of course. You'll have to look into your particular options.
MD is a recourse state. This means in theory that even if the bank agrees to a short sale, they can come after you for the difference. If you walk and let them foreclose, it's the same deal.. they can sell it and pursue you for the difference. Note the "in theory" caveat above. In practice, many lenders were/are overwhelmed with such properties and have not pursued significant numbers of the mortgage debtors. As the housing slump eases, though, this may change, and the lenders have until the statutory limit on the debt to pursue you (7 years in most places.)
Your retirement accounts are generally protected from seizure, as is your principal residence. To collect from you without significant assets to seize, the bank would have to go to court, get a judgment against you, and proceed to try to have your wages garnished. Anecdotally, I have not heard many stories of this happening.
I considered doing this several years ago with my primary residence (which was underwater perhaps $70k at the time.) Instead I sat on it, paid the mortgage payments, and I'm currently finishing a bunch of renovation work on it before putting it up for sale. The market has recovered quite a bit and I believe I'll do OK when it sells.