09-15-2010 04:26 PM
My husband was recently divorced when we met. The judge in the divorce ordered him to quick claim deed the house to his ex-wife. A couple of years after the divorce she decided to stop making the house payments thus causing a foreclosure. Since the loan was in both names (my husband being the primary borrower) there is now a foreclosure on his credit report(s).
We are in a place that we need to refinance our home but no banks are willing to consider us. Does anyone have any suggestions? We have tried explaining the situation and even though most can understand none are willing to help.
I have tried asking the credit bureaus to remove the foreclosure but have been unsuccessful to this point.
Any help, suggestions, people in similar situations would be greatly appreciated.
Thank you in advance for any input.
Unfortunately divorce decrees virtually never can bind a pre-existing creditor. In the situation you've described, the mortgage holder is well within their rights to hold your husband responsible for the debt, which includes credit bureau reporting. Ultimately the only person who can help him solve this issue is the mortgage holder themselves.
Your husband would likely have recourse against his ex-wife, but since she was unable to pay the mortgage it may be that he would not be able to collect and judgment he ultimately obtains against her. Still, it is worth getting a judgment as judgments can live a long, long time and in another ten years or so maybe he could use it to get money out of his ex-wife. If the property is not under water, perhaps he can obtain a quitclaim deed from the ex-wife and he can then assume the mortgage obligation directly.
In any event, you should consult with a local attorney. These situations can be complex and there is the potential for problems far greater than negative information on his credit report.