Chicago Underwater Mortgage — Short-Sale Alternative in 28 Days

The situation

Diane owed $238,000 on her Chicago two-flat in Belmont Cragin, but the property's after-repair value was only $215,000 and it needed $30,000 in roof, mechanical, and tuckpointing work. She was $40,000 underwater on the mortgage and facing job relocation. A traditional short sale was the obvious path but typically takes 3-6 months and is uncertain.

The challenge

Underwater properties can't sell traditional without bringing cash to closing or convincing the lender to accept a short sale. Short-sale lender approval is unpredictable. Diane couldn't bring $40K to closing and couldn't wait 6 months for a maybe-approval.

What we did

1. Inspected the property and verified condition + ARV.
2. Submitted a written cash offer of $135,000 directly to the lender's loss-mitigation department as the short-sale price.
3. Worked with Diane's attorney to coordinate the short-sale application + financials.
4. Lender approved the short sale in 24 days based on our written cash offer.
5. Closed at a Chicago title company on day 28.

The outcome

The lender accepted $135,000 against the $238,000 balance, releasing Diane from the remaining $103,000 with no deficiency judgment (Illinois lender waived per the short-sale agreement). Her credit took a moderate hit (~95 points) but avoided the 150+ point hit of foreclosure. She moved to her new city on schedule.