Legal Question in Real Estate Law in Illinois

Re: home mortgage

In a Deed in Lieu the foreclosure goes away. You hand over the deed and the bank declares the loan satisfied. The advantage is that there is no judgment of foreclosure on your record. In short, you give up on trying to keep the house and the bank gives up on collecting the entire amount you owe.

Be aware, the is not a Consent Foreclosure - there the house goes to the sheriff's sale right away and you still owe whatever the sale did not bring in. The only 'good' thing about that is that the "Bandage is ripped off".

I would work for a mortgage modification. You keep the house and you can refinance when things get better. A mortgage mod will probably be better in the short run, but worse for you in the long run. A Deed in Lieu is a form of surrender.

Re: home mortgage

If your lender will accept a deed in lieu, no foreclosure takes place. You are gicing them the deed to your house and saving them time and expense. It enables them to sell your home at a lower breakeven amount. In such a situation, they do not proceed for any deficiency.

Re: home mortgage

As far as your credit goes none of t options is really good. A third option is a short sale, where you sell the property for less than what is owed on the mortgage.

You may be able to negotiate how this is all reported on your credit. It is best to find out how they will report it before you finish the transaction.

A fourth option is to do nothing. You have at least 7 months after they serve you or three months after judgment until the mortgage company can sell the property. As a practical matter it may take the mortgage company 12 months to remove you from the property before they they an kick you out.

There are other thing you an do too.