Anachostic

Hey guys,

I have a question, but I'm not sure even how to ask it or what answer I'm really looking for. As such, this post will be long and rambling and I apologize for that. As I've posted before, my divorce is imminent, but we're at odds about how to handle an upside-down house. So progress on that is stalled.

I've recently learned the wife is scouting properties and has contacted a title company. I must assume she is looking to move out. She has not discussed this with me at all. Here's the overview:

The wife owns a house of her own (premarital) in a different state. A divorce lawyer has advised me that I have a partial claim on this property since she has been continuing to pay its mortgage throughout our marriage using marital funds. This house has positive equity.

The house we are stuck in is in both our names and has negative equity So, I can't refinance it to my name only. I pay the mortgage on this property.

Now this third potential property... First, I don't see how she can afford it, since I know her finances. She could take out equity from the first house and use it buy this new one or even sell the first property. That aside, what I'm concerned with is if she is able to get this loan on her own, do I become an implicit co-owner of that property as well as co-owner of that debt?

I guess what I need to hear is a few pointers on what I need to do immediately (aside from ramming this divorce through NOW - that's a given), what I need to insulate myself from, what I need to watch out for to avoid getting fucked more than I already have, and who I can call to get more direct and personal advice on this matter.

Thanks in advance for the collective wisdom of AZ.

jupitersolo

Your name won't be on the new houses title. But more will come her with better insight.

Will Y.

Hire a family law lawyer now if you haven't already-- that lawyer should be able to tell you all the implications.

Get copies of all documents showing the use of marital funds/property for that property, and documents showing your payments on the current upside-down property.

G/L.

Anachostic

I have a new question regarding refinancing.

As an update, we did get divorced. Because the house was underwater and neither of us wanted to damage our credit with a short sale or foreclosure, we kept the house as it was in both our names and had an agreement for bills. I pay mortgage, she pays taxes, insurance, and lawn care.

Five years down the road, my ex has stopped paying her obligations and I want to buy the house from her. I can't force her to sell and we're at an impasse. She doesn't have a problem with me refinancing to save money. But, she's in debt collection multiple times over so her credit is shot.

My question is: Can I refinance on only my credit history or will the bank have to bring her credit in because her name is on the mortgage? Is that going to hurt my chances of approval or make my interest rate worse? My credit is spotless.

stogie1020

I am not an expert by any means, but you should be able to, with her consent, have her name removed from the deed so you can refi in your name only. I would have a legal agreement drawn up indicating that she is still responsible for the bills she should be paying, and is entitled to 50% (or whatever % you decide, if any) of any proceed of future appreciation, etc...

damaged442

My soon to be ex wishes to stay in the house. In order to do so, she needs to buy me out of it. We had to hire an appraiser and subtract what you owe on the house from the appraisal.


Split that 50/50, and that is what I get to walk. I am to quitclaim the deed, and the paperwork that the lawyers are drafting will give her 90 days to refi in her name. This will eliminate me from any responsibility, if she chooses not to keep paying the mortgage.


I would do the same to your ex, if I were you. See what your lawyer says about it. If she isn't paying her end of the bargain, time to move along so you don't get dragged down too.


Good luck. This divorce crap sucks. I certainly hope all you newbies that are excited to be getting married have much better luck.

Anachostic

Stogie, She's not going to willingly turn over ownership in the property with a quitclaim deed. That's what the whole purchase deal was for. And I doubt at this stage that she going to agree to a new stipulation when she has it just the way she wants now.

Damaged knows what it's about. He's lucky the house is in a state where it can be sold. Remember back in 2010, banks weren't doing a lot of favors for people who were underwater. Even when HARP came along, I wasn't eligible because my 2nd mortgage wasn't from an approved lender.

If we can't reach a purchase agreement, I'm moving out. I'll just buy a run-down 1/1 box to live in. If she moves back in, all the bills are going to her. If she doesn't pay, I start banking the mortgage payments and we all lose.

Will Y.

If you have the income to carry a mortgage by yourself, the bank won't need to run the ex's credit, as the new mortgage replaces the old one that she is on. However, she will have to sell to you or sign a deed to you in order to permit the refi in your name alone.

If she wants to maintain an ownership interest without paying into it, see your lawyer. IDK that a mortgage broker would want her on a deed without a mortgage, although I've seen some odd/fraudulent stuff before.

G/L.

oo7spy

This is quite possibly the saddest thread I've ever read.

I can't help but ask, why the hell did your spouse own a second home while you were married?

Anachostic

I could carry it myself (as I always have), but she's not giving up her stake.

There's a reason for everything as it was and as it is. Back then, her dad lived in her house and was allowed to until he died. He did pass away after our divorce, so that house is done and gone now.

And now, she has been living and building a business elsewhere, but our house has been effectively a mail drop and storage unit for her stuff. I believe it is also a safety net if her business venture fails, so she has a place to live if everything falls apart.

And in the last few months, everything has fallen apart. I thought I would be able to use that situation as leverage since she needs money desperately, but it doesn't seem like she's responsive at all. This has been a decade-long illustration of egocentricity.

oo7spy

How far upside down is the house?

doopstr

Back in 2010 you should have followed the path of Bubba.

-->https://acurazine.com/forums/money-i...25-yes-836489/

The headache of the underwater house would be gone and your credit would almost have recovered by now. As a plus you probably wouldn't have any contact with your ex.

Anachostic

Depends on your definition of upside down. It's Zillow worth is 30k less than purchase price, but the mortgage is 30k less than that. So 30k equity on the loan, but a 30k loss on purchase.

Hindsight is 20/20. Neither of us were willing to make that sacrifice to our credit score. Hers is sunk, so she has nothing to lose anymore. Hopefully, it doesn't come to that.

The ex talked to a couple of realtor friends that say a refi might be possible. That would just be a bonus for me at this point. No purchase agreement, no live there.

oo7spy

Dump the house. $9k now (assuming 50/50 split less closing cost on $200k home) or... what?

Cut your losses, emotionally and financially.

YeuEmMaiMai

exactly

get out of that mess asap.

You are going to have to document the agreement where she said she would pay XYZ

then document the payments you received
then document when the payments stopped.

A good lawyer may be able to argue on your behalf that she abandoned all interest in said house when she quit paying as agreed. if you are lucky might be able to get the house all to yourself ownership wise or you might be able to put a lean on her house that she is in now for said funds + lawyer fees + other related fees

Anachostic

Well, here's the story of the resolution to finish out this saga.

At the beginning of 2015, I had consultations with a few different lawyers on presenting a buyout offer to the ex. After choosing one (poorly, in hindsight), I had him compose an offer letter and the process got stalled with a lot of finger-pointing attorneys over who was not contacting the other. So that went nowhere and I felt completely trapped. I started looking for other properties to move into so I could abandon this house. In late 2015, I discovered something called a partition action, which basically is a court-ordered sale of the property.

With this new knowledge, I talked to another lawyer who drafted a stern letter saying accept this offer or we will file for partition and it will cost everyone a lot of money. Whether it was that threat, or the fact that the ex was finally getting her life back on track, or the fact that my new offer was more than double the original offer and fully backed up with two appraisals, she accepted.

We exchanged a check for an executed quit-claim deed which has been recorded. I've worked through the refi of my mortgage into just my name, which has been excellent for me - from a 30yr @ 5.6% to 15yr @ 2.75%. I close on the refi next Monday and the ex is moving all her stuff out the same week.

This ends a terrible chapter of my life and I'm very optimistic about the future. The house needs a lot of money and effort to bring it up to the standard I want, but I can now be assured it's all mine.

KaMLuNg

iTrader: (5)

good luck... glad it is moving in a better direction...

stogie1020

Glad you are moving on.

This sounds like a nightmare to have to deal with...

gatrhumpy

iTrader: (1)

Glad you're getting on track sir!