All three loans have the ability to come back or pursue a deficiency. The first, the Second, the HOA, and the PMI. Illinois is a recourse state, It means that IF the bank allows a short sale they still retain the right to pursue a judgment for the ramaining deficiency. In a Foreclosure each lien takes its rightful place in the repayment schedule. Each bank has its own standard operating procedure as to what they will and can allow.
Sometimes, they will allow to waive that right in negotiations of a short sale.
For credits sake, it is best not to allow a foreclosure sale. Foreclsoure stays with you much longer on your credit report than a short sale. In a short sale, once the debt is payed off, it shows on your credit report, as debt PAID IN FULL, or a negotiated settlement. It will not appear the same as a Foreclosure, which presents itself on your credit report as a refusal to repay.
If you'd like a complimentary consultation to observe your options, please feel free to contact me at (224) 267-5472 or Lisa@MadewithSchade.com
It is in your best interest to seek legal advice from both a tax advisor and a foreclosure attorney. If you are in need of a referral to either please feel free to contact me at (224)267-5472 or Lisa@MadewithSchade.com
Best of Luck!
First Weber Group
Certified Distressed Property Expert
Illinois is a "Judicial" and/or "Recourse" state so that is not uncommon. Banks are also able to do that with short sales & foreclosure properties.
I recommend you speak with an attorney who is familiar with your situation....they would be able to give you legal advice & options.
Laura Karambelas SFR, CREN
Short Sale & Foreclosure Resource Agent
Yes. You will want to confirm if the 'debt' is recourse or non-recourse. If the debt is legally non-recourse then the lender, creditor or pmi company does not have the legal right to collect the debt and cannot file a lawsuit in effort to obtain a judgment against you. However, if the debt is recourse debt, if the 'debt' is legally your obligation then yes the creditor can attempt to collect from you and the remedy is to take you to court and sue you for a deficiency judgment. You also have an opinion and can go to the court house in order to plead your case and try to get the Judge to throw out the case. Good luck!
Hannah Fliegel, FICO Pro
Scott Riddle, P.A.
Realtor Certified Short Sale Professional
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