Shortsale with attorney in Illinois (sale, fee, percent, properties)

[Humboldt1]

I have two properties in Illinois that I own. One is a 3-flat in Humboldt Park (west side of Chicago) and the other is a townhome in Itasca (northwest suburb).

I owe 273k on Chicago property and paid 360k for it in 2006.

I owe 208k on the Itasca property and paid 215k for it in 2003. I rent both out but live in one unit in Chicago property.

I have approached the lenders about modifications but have started talking to attorneys about doing a short sale (strategic default). My goal is to work with an attorney to drag the process out and continue to collect rents.

I found one attorney who will do it for 550 per month per property but this seems high to me. Granted I will save 1900 per property less the fee but still seems high.

Also, the attorney gets 10 percent of any principal reduction should we work out modification (highly doubtful but I wouldn't mind keeping the Itasca property).

What are other people doing to protect themselves in Illinois? My understanding is that people such as myself are able to drag this out 1-3 years depending on the lender and the situation.

I put 20 percent down on both properties so both notes were sold to investors and not held on the books of the loan providers.

What would others in my shoes do and what have other people done?

Also, how much of a hit to my credit should I expect?

I am willing to rent for a few years but would like to buy properties in the future.

I am willing to walk away from both properties or do a loan modification if it makes sense.

Your advice is greatly appreciated. Thanks.