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Question about divorce and mortgage.
Old 06-18-2007, 05:07 PM   #1
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Question about divorce and mortgage.

I have a friend who got divorced about 3 years ago. However due to her stupidity she did not make him sell the house. She is still listed on the mortgage which he her ex husband is now going to be foreclosed on.

Is her credit going to be hammered?

Is she still financially stuck with this note. She left the house she divorced him. She is afraid of him. Physical abuse was involved here.
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Old 06-18-2007, 05:11 PM   #2
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She's probably on the hook for it. What does the divorce decree say about the loan?

Might depend on which state she lives in, but generally divorce decrees are binding on the named parties and not on 3rd parties like mortgage companies.

Which is why her lawyer should have suggested a refinance or other route to remove her name from the mortgage as part of the process.
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Old 06-18-2007, 05:13 PM   #3
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She's probably on the hook for it. What does the divorce decree say about the loan?

Might depend on which state she lives in, but generally divorce decrees are binding on the named parties and not on 3rd parties like mortgage companies.

Which is why her lawyer should have suggested a refinance or other route to remove her name from the mortgage as part of the process.

I told her that a year ago. Now she is in a tizzy. What a mess.
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Old 06-18-2007, 05:19 PM   #4
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A divorce decree is only binding on the two parties to the agreement. It is not binding on a lender. So, unless the lender released her from her obligations on the note, she is still liable to the lender, but she does have a claim against her ex spouse. For what it is worth.
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Old 06-18-2007, 05:22 PM   #5
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If the mortgage reports on her credit report (which it probably does), she'll get hammered.

I don't know if it would be worth it but I think there is a way for a person to add a note of explanation to negative items in his/her credit report. That might be worth doing?

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Old 06-18-2007, 07:29 PM   #6
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Originally Posted by Martha View Post
A divorce decree is only binding on the two parties to the agreement. It is not binding on a lender. So, unless the lender released her from her obligations on the note, she is still liable to the lender, but she does have a claim against her ex spouse. For what it is worth.

I would doubt that any lender would let her off the hook divorce or no divorce.
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Old 06-18-2007, 10:06 PM   #7
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Originally Posted by newguy888 View Post
I have a friend who got divorced about 3 years ago. However due to her stupidity she did not make him sell the house. She is still listed on the mortgage which he her ex husband is now going to be foreclosed on.

Is her credit going to be hammered?

Is she still financially stuck with this note. She left the house she divorced him. She is afraid of him. Physical abuse was involved here.
She ought to meet with a lawyer in her state ASAP. Often, foreclosures will result in the debtor losing what equity (if any) they may have had in the property. If this property was bought several years ago, it wouldn't surprise me if there were equity in the property through appreciation, even if the monthly payment weren't regularly made. If so, she may have some options to salvage what equity there is in the property. Just my two cents.
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Old 06-19-2007, 06:18 AM   #8
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She ought to meet with a lawyer in her state ASAP. Often, foreclosures will result in the debtor losing what equity (if any) they may have had in the property. If this property was bought several years ago, it wouldn't surprise me if there were equity in the property through appreciation, even if the monthly payment weren't regularly made. If so, she may have some options to salvage what equity there is in the property. Just my two cents.

It looks as though they or really her ex was cashing out with home equity lines of credit.

In North carolina have a feeling they are owing more than its worth.
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Old 06-19-2007, 08:29 AM   #9
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Having been through one, I can attest that divorce is often equivalent to financial disaster for both parties.

My experience was similar. We paid only $250 for the entire divorce, and there was no legal property settlement (you get what you pay for?). I gave him the house in exchange for his promise to pay off the $10K-$20K we owed on our credit cards. I didn't get my name off the mortgage or the credit cards, though we both tore up our cards at that time. I trusted him. Oh well. The house was nearly foreclosed upon, and he didn't make any payments on the credit cards.

The result?

For a few years I couldn't borrow a nickel to save my life. Offers for my daughter (who was in college) to get a credit card appeared in the mail abundantly, but there were no offers for me, and my applications were denied. I couldn't get store credit cards either. I even tried to buy a mattress on credit at usurious interest rates, and was turned down. With no credit card or loan payments, I was saving a lot of money. When I needed a new car, I wrote a check for it.

Then, four and a half years after my divorce, I bought a house. Much to my surprise I had no problem getting a mortgage, though I paid 0.25% higher than the lowest possible 30 year mortgage rate at the time. After that, the credit card offers started rolling in. However, I was angry about my prior problems in getting credit when I really NEEDED it, so I decided not to ever get another credit card or borrow another cent from anybody. That has turned out to be the best thing possible for my ER plans.

My credit score is absolutely sterling by now (9.5 years after my divorce), higher than anybody I know. This is a story with a happy ending.
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Old 06-19-2007, 08:53 AM   #10
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When I left my ex all the bills were up to date and we didn't have any credit cards. He was an alcoholic who didn't work so I knew he wouldn't keep up the house payments. I don't think I could have forced him to do anything, he was violent so I didn't even talk to him. I applied for credit cards the day I left him and got several the next few weeks, used each one once then stopped. He told me he got the house because it was his VA loan we owed 100% and I didn't want him to know where I lived so I just left. He did lose the house but I never was effected by it. I was able to buy a house 2 years later. I didn't even know how lucky I was I didn't watch my credit rating at all then other than that house and a couple of cars we never used credit.
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Old 06-19-2007, 09:43 AM   #11
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Hi newguy,

I'm sorry for your friend's troubles. I fear that she is in for a mess, as she is, I believe, liable for any debts with her name on it.

I've been through it too, although I got to keep the townhouse because the ex couldn't afford it by himself. I had to pay him some cash for 1/2 the equity (but it wasn't much at the time), and the first thing I did after the divorce was to get his name off the deed. The second thing was to refinance the loan with his name taken off.

I hope she can sort this out with minimal pain.
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