Legal Question in Real Estate Law in Illinois

Re: short sale

The foreclosure timeline is usually: 3 missed payments; foreclosure filed; you're served with court papers; you have at least 8 months from the date you're served until the lender can kick you out (if it's your home). All the above assumes the lender's not trying to pull a fast one or the attorneys aren't incompetent or overwhelmed and make a mistake.

I wouldn't sit back and let the bank foreclose 'cause that's really rough on your credit. You have a lot of options. If you want to stay in your house, you could try to negotiate with the lender (lower the interest rate; put the deficiency on the back end of the loan; or pay, say, 1.5 times your usual monthly amount until you catch up).

If you don't mind leaving the house (and it may turn out you have to for obvious reasons), you could sell it straight up or "short sell" (as you mentioned). You could do a short sale yourself but in my experience they're really tough to accomplish because the banks are such a pain to deal with. One hint: if you do short sell, try to get the bank to waive the "deficiency" (the difference between what you owe and what they accept) because in theory they could come after you for it (although in practice they rarely do). The deficiency is now a personal debt (like a credit card) which can be wiped out in bankruptcy in a pinch. Even after all that, your credit is probably in far better shape than just letting the bank foreclose.

Hope that helps. If you still have questions, contact me for a free consultation.

Re: short sale

A Short Sale would protect your credit, which letting the foreclosure complete would not. I don't think you -really- need an attorney, but you must remember that the lender must agree to the Short Sale.

The only rights you have in Illinois are Redemption (paying off the full amount of the loan still owing) and Reinstatement (catching up on the missed payments and the lender's legal costs).

You have at least six months from the time you are served with the Complaint in Foreclosure before the judicial sale happens. I would talk to the lender about options and find out what they will accept. If you live in Chicago call 311 and ask for HOPI (Home Ownership Preservation In.) They can help bargain for you.

I would hang on for all the time you are allowed - things might happen to benefit you such as legislation or an improving economy in your industry.