Based on your saying the condo is "under water" after a foreclosure sale there will be a deficiency (amount owed on the mortgage +++ less net proceeds of foreclosure sale) the lender probably will get a "deficiency judgment" in that amount, and then any assets that you and your wife own together (other than a primary residence held in tenants by the entirety) could be at risk. The news yesterday is that "foreclosures are up 43%" in Illinois, meaning lenders are moving more loans in default into foreclosure posture. Foreclosure sales are depressing values all over....so by the time your situation makes its way through foreclosure, a deficiency could be larger. Time to talk to an attorney and possibly a real estate broker about options, including such things as short sale and "deed in lieu" if your lender will listen, but I caution about trying these things as a DIY exercise.
