Legal Question in Real Estate Law in Illinois

Re: short sale of my house

Sometimes the balance is forgiven, but usually not, unless you specifically negotiate that point. The fact that your ex-husband refuses to sign anything is more problematic at this point. If he still owns it, you are going to need his signature on the purchase agreement and the closing documents. You need to contact your divorce attorney if he refuses to sign. You need to contact a real estate attorney to assist you with the short sale as well as the "regular" part of the sale.

Re: short sale of my house

I think I may've already answered part of this question, but anyway here goes.

Short sales are extremely difficult for the average person to negotiate, as you've experienced. My (somewhat biased) advice is that you get a real estate attorney who has expertise in such matters (coincidentally like myself). There's little (see the deficiency discussion below) if no down side if the attorney doesn't charge up front (most don't), because the bank is taking the loss anyway. So the money is really coming out of the bank's pocket. Also, the banks insist you can't walk away from the table with any money.

Regarding the deficiency (the difference between what you owe and what the bank accepts), more often than not, you can get the bank to waive it. The deficiency is a personal debt (like a credit card debt) because the collateral (house) has been sold and the mortgage/lien (or security for the debt) is now gone. Tha means you could file bankruptcy if you had to to wipe it out (that's a last resort).

The main reason to get the bank to waive the deficiency is that so your credit report is cleaner. Because as a practical matter, the banks rarely or never try to collect it anyway. I think they figure it's probably throwing good money after bad. Also, there was a recent tax law change so that it's no longer (through 2010 or 2011, I think) considered income to you. That only applies to your personal residence, so it's best to check with your accountant on that point if it comes down to it.

As the other attorney mentioned, your first problem is getting your husband to cooperate. Without that, it'll be difficult to do anyhting.