Divorce and mortgage

Anonymous · ‎06-05-2010

My ex-husband got the house in the divorce. There is an outstanding mortgage and line of credit. He has been attempting to refinance to get my name off the loan, but has been turned down to due to low income. He's currently 60 days late. He wants me to sign a quit claim, but I refuse as long as my name is still on the loan. The house is not under water, but the town we live in has rights of first refusal, as it was purchased through a special low income program. He thinks refinancing is a couple years away, and that he's going to get caught up on the payments. I'm not sure I can live with that, and that bankruptcy is my only recourse. I've worked hard to up my credit rating, up 100 points since last August already. The mortgage is the only negative on it. Please, any suggestions would be greatly appreciated.

GregB · ‎06-07-2010

The laws and normal procedures will vary by location.

Here, the norm when one spouse retains the house:

1. The other spouse signs off the legal ownership of the house. Here that is done with an Intespousal Transfer Deed.

2. The Mortgage remains unchanged since the lender is not going to let one signer off.

3. The spouse retaining the house is paying for that by taking the house at full value instead of the reduced price if the house was sold. This should have resulted in you ending up with other assets or less debt on your side of the equalization.

4. The Divorce Judgement requires that the spouse that retains the house make all payments on the loan. You would have some recourse if he doesn't do that but that is rarely easy to accomplish.

You didn't have to sign off on the house as part of the divorce? If he is not staying current on the payments, you might want to think about forcing the sale of the house. Each ex-spouse should be extra-careful to not damage the property of the other ex-spouse.

Anonymous · ‎06-07-2010

@GregB wrote:
The laws and normal procedures will vary by location.

Here, the norm when one spouse retains the house:

1. The other spouse signs off the legal ownership of the house. Here that is done with an Intespousal Transfer Deed.

2. The Mortgage remains unchanged since the lender is not going to let one signer off.

3. The spouse retaining the house is paying for that by taking the house at full value instead of the reduced price if the house was sold. This should have resulted in you ending up with other assets or less debt on your side of the equalization.

4. The Divorce Judgement requires that the spouse that retains the house make all payments on the loan. You would have some recourse if he doesn't do that but that is rarely easy to accomplish.

You didn't have to sign off on the house as part of the divorce? If he is not staying current on the payments, you might want to think about forcing the sale of the house. Each ex-spouse should be extra-careful to not damage the property of the other ex-spouse.

3. Not necessarily. There are at least dozens of scenarios where that would not be the case.

4. Unless the creditor forces her to pay the debt, I see no recourse.

How would she be able to force the sale of the property?