Maryland faces a potential loss of as much as $100 million as a result of the collapse of the real estate subsidiary of Community Savings and Loan known as Equity Programs Investment Corp. (EPIC).

If the state and other EPIC creditors can come up with a plan for an orderly sale of EPIC's property, the losses could be cut, but Maryland still in all likelihood will have to provide millions of dollars to pay off depositors at Community, sources involved in the effort to bail out EPIC said. Officials said the negotiations are close to resolution, but they would not say by how much Maryland stands to reduce its exposure.

Maryland took over responsibility for insuring Community and other privately insured thrifts in the state earlier this year. That responsibility includes more than $100 million in depositors' money that Community lent to partnerships established by its EPIC subsidiary. Although some of the loans were first mortgages, which could be collected by foreclosing on EPIC properties, the bulk represented unsecured advances -- loans that were not backed by property or securities.

Under federal bankruptcy law, unsecured creditors rank lower than secured creditors, such as the thrifts and other institutions that own more than $1 billion of EPIC mortgages and mortgage-backed securities. As a result Maryland could be left standing at the end of the line of creditors trying to collect from EPIC, lawyers involved in the case say.

Maryland's claim on EPIC's assets may have been weakened seriously by the way Community handled some of its debts from EPIC, bankruptcy lawyers say. About $25 million in second mortgages on EPIC property was not recorded on local land records, for example. Since the mortgages were not recorded, they are regarded as unsecured claims that will be paid last.

Maryland Gov. Harry Hughes acknowledged at a news conference this week that the potential loss at Community "might be as much as $100 million. It's in that ballpark -- $80 million to $120 million -- something like that."

"The whole EPIC bankruptcy is a black hole that the state needs to escape," said another Maryland official monitoring the situation.

Since the financial problems of Community and EPIC were disclosed in August, Maryland has been negotiating with EPIC creditors and mortgage insurance companies over how to avoid the losses that would occur under a forced sale of more than 20,000 houses bought by EPIC partnerships.

Those negotiators are in a difficult position because of the state's back-seat claims to recover EPIC money, lawyers said.

Community holds about $25 million in EPIC first mortgages, as well as the $25 million in second mortgages, plus as much as $70 million in other unsecured loans to EPIC partnerships, according to the negotiators.

Unsecured claims "would only be paid in the event that there are assets that are not covered by the mortgages," said William J. Pearlstein, an attorney representing a group of major institutions that hold EPIC mortgage debt. The group includes the Federal National Mortgage Association and the Wall Street investment house of Salomon Bros.

Pearlstein and other lawyers stressed, however, that there are some sources of money to which Maryland might have a stronger claim. Moreover, they said, Maryland also could improve its position if negotiations are successful for a plan developed by the investors group to liquidate the EPIC properties in an orderly fashion.

"There are a large amount of assets that may provide return to unsecured creditors. Maryland believes it has a good claim to a substantial amount of assets," said Daniel Lewis, a lawyer retained by the state to help sort out EPIC's affairs.

Sources said Maryland's potential sources of recovery include: Approximately $39 million in notes, representing money lent by EPIC to limited partners. Several million dollars in rents generated by EPIC properties in August and September. Any value in two affiliated EPIC companies that managed the properties and serviced the mortgages. As much as $30 million that may have been advanced from Community in order to prop up EPIC shortly before its demise. Under one legal theory, Community might have a special claim to these money even though they represented unsecured loans, because they were advanced to shore up the concern.