Legal Question in Real Estate Law in Illinois

Re: Short Sale in Des Plaines, Illinois

Most likely, it will adversely affect your credit. Often the short sale releases only the lien against the real estate, and you still owe the balance. There can also be tax ramifications involved in a short sale. And no, it does not matter whose name is first.

Re: Short Sale in Des Plaines, Illinois

I/m not sure which is worse for your credit: a short sale or a foreclosure judgment. My guess is the foreclosure judgment is worse, but maybe you have a mortgage broker you could ask. If not, contact me and I'll try to get you an answer from one.

Also, you can negotiate whether the deficiency amount (the difference between what you owe and what the bank accepts) will be written off by the bank or not. My experience is that it's very rare for the bank to come after a person for the deficiency. But of course it's best if you get the bank to explicitly agree not to pursue any deficiency. Keep in mind it's harder to negotiate a short sale with two mortgages/lenders than it is with one mortgage/lender. It shouldn't make any difference whose name is the first one on the mortgage.

Finally, due to a very recent income tax law change, the deficiency is no longer considered income to thwe homeowner. At least there's some good news!