My hubby was in a similar situation. He and his ex wife were both on the mortgage for their house. They had agreed to sell it and the divorce decree provided that they both would make pay half the mortgage until it was sold. Ex wife did not make a single payment on the house. Unfortunately, this happened right when the housing bubble burst so the house did not sell and the value of it fell so much that it was about 100K underwater. Hubby made the payments on his own for a while, but eventually the house went into foreclosure because we needed to move. His attorney said that he could file for contempt against his ex wife, but that it would pretty much be a fruitless endeavor because she was broke and plus he did not want to do anything to hurt the children. She had also moved to Texas which is a very debtor friendly state.
It's terribly unfair but there's not much you can do about it legally or otherwise but move on and rebuild. Hubby and I are going to buy a home with just me on the mortgage. He has been able to rebuild his credit somewhat and has been able to get car loans and credit cards. So the foreclosure is not really going to matter that much anyway. For you, I hope you are able to preserve your rights to the VA mortgage.
It can take a long time for the foreclosure to go through. Hubby stopped making payments in 2011 and home did not foreclose until this year because of some problem with the paperwork. No deficiency judgments were filed and we're past the statute of limitations on it. It was a 80/20 loan and it's conceivable the second mortgage lender may come after hubby at some point within 7 years, but we'll just have to wait and see. His attorney told him if that happened he could probably negotiatle it down to less than half of what is owing.
