It is discouraged. It is generally considered best for a child to be raised in a two parent home. This is usually best achieved by putting the child up for adoption so that it can go to a family that is prepared to take care of it. The other way to achieve this would be for the couple that created the child to get married. The latter option is less preferable for the simple fact that if the couple is having sex out of wedlock, then they are not showing the level of commitment needed for a successful marriage*. This would be especially true if one or both of the "parents" is still a minor. This is a rather broad statement. Not all couples who marry under these conditions will divorce. Some will have very happy and loving relationships with each other and be good parents to their child(ren). However, such families are the exception. Most marriages that are entered into under such circumstances don't last. This leads to broken homes and situations were children only visit one of their parents. A much less than optimal setting for raising children. Thus the preference for adoption. That being written, having engaged in the act that resulted in pregnancy (assuming that we are not talking about rape) the mother has committed one of the most serious sins that she could. This will mean that she needs to do some serious repenting and will probably be subject to church disciplinary action. If, for what ever reason, she does not marry the child's father, but still decides to keep the child, she should not be ostracized by the church. Once she has completed the repentance process, she would be accepted back into full fellowship with all the rights and privileges of any other worthy member. Note, if the father is LDS too, then he would have to go through the same repentance process.. *Statistics show that couples who have sex/shack up before marriage are more likely to divorce than couples who wait until after marriage.)

I want to clarify that although engaging in sexual relations outside of marriage is considered a sin, having a baby is not. The process an expectant mother goes through in such a situation is and should be treated with compassion and love. Whether she decides to keep the child or give the child up for adoption, she is not disciplined for THAT action, it is for the action of having sex outside of marriage. As well as the father of the baby. The Church doesn't have an official position, just, as was already mentioned, it is discouraged. Explanation about discipline: Someone who engages in extramarital relations likely goes through some sort of discpline, for example, not being able to hold a calling for a specific period of time or participate in certain ordinances (in the temple for example)

http://www.mormonwiki.com/Adoption this link provides an accurate and, from I know, the most current mormon view on children born out of wedlock. Adoption From MormonWikiThe Church of Jesus Christ of Latter-day Saints teaches that the family is central to life and that children and parents are bound together to help each other throughout life. Because family is such an important part of LDS doctrine and culture, adoption can create unique concerns and questions within the LDS community. Children Born Out of Wedlock In 1994 the First Presidency of the Church wrote a letter that was read to its members concerning adoption, and babies conceived out of wedlock, part of it said, Priesthood and auxiliary leaders are again encouraged to renew their efforts to teach ward and stake members the importance of living chaste and virtuous lives. We note with alarm the continued decline of moral values in society and the resultant number of children being reared by unwed parents.... Every effort should be made in helping those who conceive out of wedlock to establish an eternal family relationship. When the unwed parents are unable or unwilling to marry, they should be encouraged to place the child for adoption, preferably through LDS Social Services.... Unwed parents who do not marry should not be counseled to keep the infant as a condition of repentance or out of an obligation to care for one’s own.... When deciding to place the baby for adoption, the best interests of the child should be the paramount consideration (First Presidency Letter, 1 Feb. 1994). Elder Monte J. Brough has given further counsel on the subject: Upon learning that sexual activity outside of marriage has resulted in pregnancy, a young woman has four choices: marrying, not marrying but keeping the child, having an abortion, or placing the child for adoption. It is important to examine these four choices in light of information from various medical studies and in light of the teachings of the leaders of the Church” (Monte J. Brough, “Guidance for Unwed Parents,” Ensign, Sept. 1994, 19). One of the controversial issues of the day centers around the practice of abortion. Abortion is strictly avoided within the Church, President Spencer W. Kimball said, Abortion, the taking of life, is one of the most grievous of sins. We have repeatedly affirmed the position of the Church in unalterably opposing all abortions, except in two rare instances: When conception is the result of forcible rape and when competent medical counsel indicates that a mother’s health would otherwise be seriously jeopardized (Spencer W. Kimball, "A Report and a Challenge," Ensign, November 1976, p.4). The Church maintains this stance thirty years later. Even when one of the rare extenuating circumstances arises the Church counsels women that abortion is still a gravely serious matter which should be considered only after having consulted with local church leaders and after fervently praying to know if the decision is correct. Of not marrying, but keeping the baby President Kimball went on to say, If pregnancy results from the sin, [of immorality]... it is the girl who suffers most. She must not have an abortion, for that would add serious sin to serious sin. She carries most of the burdens, while the boy often seems to go penalty-free. The girl must go through the uncomfortable nine months with its distress, deprivations, limitations and embarrassments, and then the pain and expense of delivery and the difficult life afterward (Spencer W. Kimball, The Miracle of Forgiveness, p.191). Church leaders stress that keeping the baby as a form of penitence does not take into account the best interests of the child or the mother. Marriage is usually considered to be the best option if it is possible. Studies show that if the parents are married before the birth of the child there is a greater likelihood that the parents will be better off financially, be able to provide a more stable home, and have a better chance of having a healthy marriage. This does not seem to be true for those who are married after the child is born. When marriage is not possible placing the baby up for adoption through Church adoption services is often the next best option. Adoptive parents are often in better economic environments, better educated, are more mature and can provide the child with a stable family life that includes both a mother and a father. LDS Family Services screens adoptive parents and makes sure they are worthy according to Church standards.