Investment property in IL, live in WI

[MissTake]

First of many mistakes, we purchased a $250,000 investment condo in Feb.05 on a 80/10 loan. Payments were affordable but was talked into refinancing to a 30 year floating CW loan by a "friend" that was also our attorney. He went thu all the paperwork, claiming it was a good deal. We signed and knew we were misinformed when the introductory interest rate went up the following month, not the following year as explained. It also took over a year to catch on to his suggested "minimum payments" tacked on nearly $10,000. Currently owe $245,927.01 on $244,000 March06 loan. Other than this loan, we have no outstanding debt, pay credit cards off each month, and have excellent credit ratings. We tried to refinance last year on serval occasions, with several lenders, to no avail due to our debt to value ratio of this loan. Although, I should mention that CW did offer us an additional $1300 a month payments with $13,000 in closing costs. Oh, on a different call, an offer to use the CW’s agent’s buddy’s plumbing company as my husband’s employer, we would qualify for a special if we could claim that he worked in the same state as the condo, "it would be more believable that he lived in the condo and could even get pay stubs matching his income"!
There are up to 50 units for sale in the 195 unit complex and most are foreclosure/short sales. It’s easy to see that our unit’s value has dropped but haven’t had it recently appraised. Our tenant’s rent is $1000 less than the monthly payment, association fee, and taxes.
We are considering dumping the place but have a concern what the recourse would be. You see, we are building a modest house, which will be mortgage free from the sale of our last home and will be ready around March. We’ll soon be out of money and my husband’s income is a little more than $25,000/yr (including unemployment as a seasonal worker.) I thought that we would have a better chance to re-fi if I brought down the loan amount by paying additional per month (robbing from our house account). The condo is in IL (where the mortgage originally took place), but we currently rent in WI. We’re able to make the current payments but may not in the future. We have not spoken to anyone since I called the CW "Work Out " line back in March to be told they couldn’t help me unless we stop using all credit cards and have missed several utility payments.
I’m not sure where to start, if we would qualify for the mod, to write hardship letter, contact an attorney? We would like to refi to a fixed with out killing our credit, but is bankruptcy an option? I have made many mistakes and would like your advise before I start running in the wrong direction again. Thank you for you thoughts!

[Professor Shays]

Good morning. A key word search on Illinois foreclosure call resulted in finding the information provided below. While Illinois does provide lenders with the capability of obtaining a deficiency judgment, the fact that lenders do not have a non-judicial foreclosure path and must resort to judicial foreclosure with its lengthy processing time, suggests that the "deed-in-lieu" or "consent to foreclosure" alternatives are utilized. Noting that, I would suggest contacting your lender and suggesting that alternative because if the lender accepts, they cannot chase you later for the deficiency shortfall.

Daniel

Only Judicial foreclosures are allowed in state of Illinois.

What is the processing period for foreclosure Illinois?
Processing period is 210 days in Illinois.

Is there any right of redemption in Illinois for foreclosure?
No, Illinois does not offer right of redemption.

Are deficiency judgments permitted in Illinois?
Deficiency judgments are permitted in Illinois.

Which law provision governs foreclosure in Illinois?
It is found in 735 ILCS 5/Art XV.

What happens during Judicial Foreclosure in Illinois?
First lender needs to send a notice to the borrower at least 30 days before the courts judgment of foreclosure. If court agrees with lender, it issues notice of sale with terms and condition of the sale. It should meet the minimum standard provided in the Illinois Statutes. The notice should be published in legal and real estate section of local newspaper once a week for three weeks. The last notice should be published minimum 7 days before the sale. The sale is conducted by the sheriff or any judge within the county where the property is located.

What happens during the Deed in Lieu of Foreclosure?
In this type of foreclosure, borrower simply has to give deed to the lender and his interests in the property securing the deed will be terminated. If lender accepts the deed, no deficiency judgments can be issued against the borrower afterwards.

What happens during the consent foreclosure?
In this type of foreclosure, court gives a judgment by which lender gets all rights related to title of the property. After this type of foreclosure, lender should not file for a deficiency judgment.
This is legal information; it should not be treated as legal advice.