[The Professor]

I can't speak to Illinois loan servicing practices relative to the rents, but I think it is safe to say that they would have to initiate court action to capture the rents. Here in California the process is somewhat complex and not used except for commercial rentals and apartments where the total monthly rentals support a decision to seek the appointment of a receiver by a court, so that the third party receiver can collect the rents and pay ongoing expences.

Going the short sale route may in many instances delay the foreclosure process because lenders and borrowers hold out hope that the property will sell and the problem will be resolved. Note however that lenders often require the borrower to sign an unsecured note for any shortfall, something I would suggest resisting. Be sure to have your parents retain an attorney to help them through the negotiations process.

Daniel