2 Investment Properties, not sure which way to go.

[czeilenga]

My question involves a foreclosure in the State of: IL

hello,
Here's a quick summary of my situation.
NOV 05 purchased primary residence condo $99k w/20% down and now no equity.
MAY & JUN 06 purchased 2 2-unit buildings 80 & 20 % financed.
MAY 08 purchased home with fiance and moved in after wedding in August 08. Could not sell condo so converted to another rental.
All properties in IL.

current situation:
I have had a very hard time with tenants in my 2 2-units and because of this and some evictions/skips I fell behind on my taxes. Aurora Loan services paid my back taxes (1yr) and then added the repayment plus current escrow to my 80% mortgage. This caused my payment to jump ~$800 which I could not cover with my very minimum monthly profit when the tenants did all pay.

I've run out of my own personal money to keep using to pay for this and have decided to try and sell the properties thru a short sale. I purchased both for ~$130k and have them listed for ~$100k knowing that I'll probably go down in price if I do get an offer. Nothing has closed in the past 6 mo to give an idea of what to ask for them. I'm continuing to collect rents to hopefully pay for my 1099 tax increase if I do sell them thru the short sale.

I spoke with a property lawyer and their advice was to first try the short-sale route and then I would have to go the foreclosure route. If they do get foreclosed on, her advice was to claim bankruptcy to protect my current home and also the condo as I am and can pay for those. This would also help me avoid a deficiency judgement. I'm wondering if all of this is necessary or if her advice also brings her the most income? What has other peoples experience been with foreclosed investment properties?

Has anyone been able to work out a modification on their investment properties. My 1st note is with Aurora Loan Services on both and then 2nd note is with GMAC Mortgage & Wilshire Credit Corp.

[HopingtoFind]

You have couple of questions here.. first relates to whether or not you should trust an attorney you spoke to. Each state is different as far as foreclosure laws are concerned... from what I have read about Illinois..lenders are able puruse dificiency judgements after foreclosure sale, so you're not protected in that respect. That said, it sound like an attorney you spoke to knows what she is talking about. Although it never hearts to get a 2nd oppinion.

As far as your 2nd question... yes people are able to get modifications on investment properties.

[chasepmt2hot-firefighter]

Hoping, How is Chase treating you on your income producing/rentals? I believe I read something a few weeks ago about you having a hard time making them understand that just because you collect rent doesn't mean you get to keep it! I think this was you who said it. Please let us know.

[HopingtoFind]

Chase has really hard time dealing with self emplyed financials where personal is mixed with business. I separated business from personal and re-submitted. So for now it is a waiting game.