We must protect this house!
June 9, 2010 10:29 AM Subscribe
Help me help my ex-wife get some House Payment breathing room.
I recently divorced my wife after about a year of separation. We worked out an agreement that she would keep our house and I would pay her $400 a month to help pay down the non-house debt.
Although we both are/were employed, losing my income has had a difficult effect on her ability to stay current on house payments and bills. She applied for a loan modification, which I gather was accepted on an interim basis but was just denied long-term. We just had this conversation:
Her: are you in the office tomorrow?
Me: Yes.
Her: Bank xxx sucks. They denied my loan modification. They dinged our credit scores.
Her: they are now advising i need to get a 'quit claim deed' form completed to make an appeal.
Her: best case scenario: i am approved, they remove the credit score dings. worst case scenario: i am denied, have to pay back money and credit scores remain dropped.
Me: :-(
Her: i got the form from staples. I have to read it tonight. I will ask xxx to serve as the notary again tomorrow.
Her: but i will need your time tomorrow to sign it. it basically says you give up the rights to the property. without it, the bank wants to make you pay and include your income in the loan modification.
Me: ok. I'm in meetings from 10:30-2:30 tomorrow but I am free any other time.
Her: and if we include your income, no modification is necessary. Life sucks.
Her: ok, i will try to do early morning or later afternoon tomorrow. I will ping you when the time comes.
Me: Ok.
I am just wondering if there are any alternatives for her(and us I guess, since I can't seem to extract myself from the house or home loan) if her appeal is denied. I'm already paying her $400 a month and it will be tough if I have to pay her still more. Plus, I don't want her to lose this house, she wants it and deserves it. Anyone been through something similar and found a workable solution or program?
I recently divorced my wife after about a year of separation. We worked out an agreement that she would keep our house and I would pay her $400 a month to help pay down the non-house debt.
Although we both are/were employed, losing my income has had a difficult effect on her ability to stay current on house payments and bills. She applied for a loan modification, which I gather was accepted on an interim basis but was just denied long-term. We just had this conversation:
Her: are you in the office tomorrow?
Me: Yes.
Her: Bank xxx sucks. They denied my loan modification. They dinged our credit scores.
Her: they are now advising i need to get a 'quit claim deed' form completed to make an appeal.
Her: best case scenario: i am approved, they remove the credit score dings. worst case scenario: i am denied, have to pay back money and credit scores remain dropped.
Me: :-(
Her: i got the form from staples. I have to read it tonight. I will ask xxx to serve as the notary again tomorrow.
Her: but i will need your time tomorrow to sign it. it basically says you give up the rights to the property. without it, the bank wants to make you pay and include your income in the loan modification.
Me: ok. I'm in meetings from 10:30-2:30 tomorrow but I am free any other time.
Her: and if we include your income, no modification is necessary. Life sucks.
Her: ok, i will try to do early morning or later afternoon tomorrow. I will ping you when the time comes.
Me: Ok.
I am just wondering if there are any alternatives for her(and us I guess, since I can't seem to extract myself from the house or home loan) if her appeal is denied. I'm already paying her $400 a month and it will be tough if I have to pay her still more. Plus, I don't want her to lose this house, she wants it and deserves it. Anyone been through something similar and found a workable solution or program?
In whose name is the ownership of the house? In whose name is the mortgage of the house? Just her? Or both of your names? Is it different between ownership and mortgage?
I think you need to talk to your divorce lawyer and get advice there.
posted by artlung at 11:16 AM on June 9, 2010
I think you need to talk to your divorce lawyer and get advice there.
posted by artlung at 11:16 AM on June 9, 2010
I have no advice to offer at all, but wanted to express my appreciation for your being a decent person in this. :)
posted by bardophile at 11:29 AM on June 9, 2010 [8 favorites]
posted by bardophile at 11:29 AM on June 9, 2010 [8 favorites]
Bank xxx sucks. They denied my loan modification. They dinged our credit scores.
I don't know the specifics of how loan modifications factor into credit scores, but this sounds like it might just be a standard "hard check" application credit score ding, which doesn't affect your score much (probably less than 10 points) and doesn't last very long (six months, I think). If she is missing house payments or this is going to eventually lead to foreclosure, that's going to have a lot bigger impact on your scores for a much longer time.
posted by burnmp3s at 11:52 AM on June 9, 2010
I don't know the specifics of how loan modifications factor into credit scores, but this sounds like it might just be a standard "hard check" application credit score ding, which doesn't affect your score much (probably less than 10 points) and doesn't last very long (six months, I think). If she is missing house payments or this is going to eventually lead to foreclosure, that's going to have a lot bigger impact on your scores for a much longer time.
posted by burnmp3s at 11:52 AM on June 9, 2010
I was nice to my ex after he was denied and the house lost about $100k in value while he waited for a higher paying jobs/co-signer/etc. This made it even harder for him to refinance and he almost had to sell it instead.
My suggestion is to meet with your divorce lawyer and get things on paper like how long this $400 payment continues, and by what date the house mortgage should be out of your name by. After that time the house should be sold (you can have it say she keeps any profits and you guys split any losses if you feel very kind). You can be generous and say a year for both to give her time, but there should be deadlines and they should be legally enforceable. When it is 2-3 months before the deadline your lawyer should send a reminder letter, then another on the deadline if nothing has changed. If you get there then there are legal rules about how the house is sold that are pretty standard.
It doesn't matter who the owner of the house is really, it is the bank if you have a mortgage. The names on the mortgage are what matters.
Some reasons why may you want to keep things simple and on paper:
- You meet someone new and you want to buy a house together - no way will banks let you if the old house is still in your name
- Your ex meets someone new who is a shady character and you have no more say in anything
- Your ex falls on hard times and can't make the mortgage, but refuses to move or sell and eventually creditors start coming after you
If you cannot afford a lawyer then go to a court house or university and ask about free legal help and have them help you draw up the docs yourself and check they are all legal. Always use witnesses and a notary for any signatures.
Note that I am not a lawyer, or even close friends with any. ;-)
posted by meepmeow at 12:16 PM on June 9, 2010
My suggestion is to meet with your divorce lawyer and get things on paper like how long this $400 payment continues, and by what date the house mortgage should be out of your name by. After that time the house should be sold (you can have it say she keeps any profits and you guys split any losses if you feel very kind). You can be generous and say a year for both to give her time, but there should be deadlines and they should be legally enforceable. When it is 2-3 months before the deadline your lawyer should send a reminder letter, then another on the deadline if nothing has changed. If you get there then there are legal rules about how the house is sold that are pretty standard.
It doesn't matter who the owner of the house is really, it is the bank if you have a mortgage. The names on the mortgage are what matters.
Some reasons why may you want to keep things simple and on paper:
- You meet someone new and you want to buy a house together - no way will banks let you if the old house is still in your name
- Your ex meets someone new who is a shady character and you have no more say in anything
- Your ex falls on hard times and can't make the mortgage, but refuses to move or sell and eventually creditors start coming after you
If you cannot afford a lawyer then go to a court house or university and ask about free legal help and have them help you draw up the docs yourself and check they are all legal. Always use witnesses and a notary for any signatures.
Note that I am not a lawyer, or even close friends with any. ;-)
posted by meepmeow at 12:16 PM on June 9, 2010
Check legal aid organizations in your area. Helping people with loan modifications and other mortgage issues is very popular with legal aid right now and there is even federal money and federal programs coming through local legal aid to deal with people--whether in foreclosure or not--who need to negotiate with mortgage lenders and mortgage servicers in part because most of them became too big and too fractured to deal with their own loans. You really can't navigate this on your own.
As suggested above, your divorce attorney is a good place to start; she will tell you--first off--whether your quitclaiming the house will do any good or do any harm. (Just because the mortgage company rep on the phone said it needed to be done does not mean it can't hurt you, or your ex-wife, or both of you.) Your divorce attorney will also be able to tell you exactly what your rights and obligations with regard to the house and mortgage are, following your divorce decree. You may be very surprised to learn how little the terms of your divorce matter to an entity with a prior lien against the house.
posted by crush-onastick at 12:35 PM on June 9, 2010
As suggested above, your divorce attorney is a good place to start; she will tell you--first off--whether your quitclaiming the house will do any good or do any harm. (Just because the mortgage company rep on the phone said it needed to be done does not mean it can't hurt you, or your ex-wife, or both of you.) Your divorce attorney will also be able to tell you exactly what your rights and obligations with regard to the house and mortgage are, following your divorce decree. You may be very surprised to learn how little the terms of your divorce matter to an entity with a prior lien against the house.
posted by crush-onastick at 12:35 PM on June 9, 2010
Response by poster: To clarify a couple of points, both of our names are on the deed and the loan.
We handled the divorce without lawyers. She is decent too and we would both be looking not to screw over the other one. So if a lawyer must be gotten I'd rather that lawyer be working with both of us and represent both of us if possible. Thanks very much for the answers so far!
posted by mreleganza at 1:05 PM on June 9, 2010
We handled the divorce without lawyers. She is decent too and we would both be looking not to screw over the other one. So if a lawyer must be gotten I'd rather that lawyer be working with both of us and represent both of us if possible. Thanks very much for the answers so far!
posted by mreleganza at 1:05 PM on June 9, 2010
So you're divorced, amicably. But you did not split up either the ownership of the house or the debt related to the house. It also sounds like you and she have an agreement that she "take over the payments," but she then needs your financial assistance to pay her other bills. This is an unstable situation, and I think will end up keeping both of you from moving forward both financially and personally from your divorce.
You're not a couple emotionally, but you are a couple--partners--in terms of this house, but you're not acting like it. It sounds like the reality is you both need to be contributing to the house to make it work, but you're not really doing that.
I think you need to bite the bullet, and sell this house. If you can't sell, you need to do a short sale / seek a deed in lieu of foreclosure. This house appears to be a source of stress for her, and now you.
Imagine for a moment one of you finds a new relationship, not that that's what either of you want or need -- would that new person want to be tied into either of you given this current scenario?
Forgive my bluntness, but it's very difficult for me to see the upside of your partnership in this house.
posted by artlung at 1:23 PM on June 9, 2010 [2 favorites]
You're not a couple emotionally, but you are a couple--partners--in terms of this house, but you're not acting like it. It sounds like the reality is you both need to be contributing to the house to make it work, but you're not really doing that.
I think you need to bite the bullet, and sell this house. If you can't sell, you need to do a short sale / seek a deed in lieu of foreclosure. This house appears to be a source of stress for her, and now you.
Imagine for a moment one of you finds a new relationship, not that that's what either of you want or need -- would that new person want to be tied into either of you given this current scenario?
Forgive my bluntness, but it's very difficult for me to see the upside of your partnership in this house.
posted by artlung at 1:23 PM on June 9, 2010 [2 favorites]
I don't think you should think of having a lawyer as a hostile move at all. Think of it more as getting everything nicely on paper and getting some advice from a professional on how you can best hand over the house to your ex.
You are also helping her by being the one engaging a lawyer or free legal help so all she has to do is sign the legal documents. My ex did not use a lawyer at all because he was confident that I would not screw him out of anything or act unfairly, and because he didn't want to pay for one. I called him after each appointment and gave him updates on everything so he had chances to object or give me more questions to ask. It would be ideal for her to have a lawyer too, but I think you are being so nice that she doesn't need one.
You cannot both have the same lawyer as a lawyer cannot represent both parties in a divorce. She cannot come to your appointments with the lawyer and sit and listen either - that is also not allowed.
I think you really need to stop thinking of yourself as a martyr or making some worthy sacrifice, it is time to be more realistic and move on and rebuild and look to the future.
posted by meepmeow at 2:05 PM on June 9, 2010
You are also helping her by being the one engaging a lawyer or free legal help so all she has to do is sign the legal documents. My ex did not use a lawyer at all because he was confident that I would not screw him out of anything or act unfairly, and because he didn't want to pay for one. I called him after each appointment and gave him updates on everything so he had chances to object or give me more questions to ask. It would be ideal for her to have a lawyer too, but I think you are being so nice that she doesn't need one.
You cannot both have the same lawyer as a lawyer cannot represent both parties in a divorce. She cannot come to your appointments with the lawyer and sit and listen either - that is also not allowed.
I think you really need to stop thinking of yourself as a martyr or making some worthy sacrifice, it is time to be more realistic and move on and rebuild and look to the future.
posted by meepmeow at 2:05 PM on June 9, 2010
Response by poster: We are already divorced. It's final. Could we still, then, not have the same lawyer?
posted by mreleganza at 2:17 PM on June 9, 2010
posted by mreleganza at 2:17 PM on June 9, 2010
I am pretty sure it also applies to anything where there is technically a conflict of interest so would most likely apply here too.
posted by meepmeow at 4:10 PM on June 9, 2010
posted by meepmeow at 4:10 PM on June 9, 2010
Also - some tips my ex learned from his epic struggle with refinancing (was eventually successful):
- You need to submit the Quitclaim deed with the starting paperwork else most places will simply turn you down when they see there are "open issues", plus refuse to say why.
- You should be prepared to contact them daily once the process gets started to keep things moving. Keep track of exactly who you spoke to and when, and keep all emails. You may also be passed between several people, this is normal.
- You should be prepared to collect all sorts of paperwork you never thought you would need for them and fax or deliver it, keep copies and receipts in all cases possible.
- You should be prepared to resubmit paperwork when they lose it, and be patient about this.
- You will probably be asked to bring closing cost money to the table. This might be a large amount and you may need to borrow it or get another loan from elsewhere for it so be prepared for that.
- You might get your house valued at a crazy low price such that they refuse to refinance - ask for a second evaluation then, and then ask how you can contest this if it is still crazily low. Eventually someone will give you a sane evaluation.
- You should ask about government programs that might apply - it might be worth jumping through some hoops to qualify for them, for example by missing one mortgage payment (ouch to credit score, yay to refinancing) - do not ask the banks about this to start, research them online first as banks can lie to try steer you away from them, know your rights first.
That's all I can think of for now!
posted by meepmeow at 4:23 PM on June 9, 2010
- You need to submit the Quitclaim deed with the starting paperwork else most places will simply turn you down when they see there are "open issues", plus refuse to say why.
- You should be prepared to contact them daily once the process gets started to keep things moving. Keep track of exactly who you spoke to and when, and keep all emails. You may also be passed between several people, this is normal.
- You should be prepared to collect all sorts of paperwork you never thought you would need for them and fax or deliver it, keep copies and receipts in all cases possible.
- You should be prepared to resubmit paperwork when they lose it, and be patient about this.
- You will probably be asked to bring closing cost money to the table. This might be a large amount and you may need to borrow it or get another loan from elsewhere for it so be prepared for that.
- You might get your house valued at a crazy low price such that they refuse to refinance - ask for a second evaluation then, and then ask how you can contest this if it is still crazily low. Eventually someone will give you a sane evaluation.
- You should ask about government programs that might apply - it might be worth jumping through some hoops to qualify for them, for example by missing one mortgage payment (ouch to credit score, yay to refinancing) - do not ask the banks about this to start, research them online first as banks can lie to try steer you away from them, know your rights first.
That's all I can think of for now!
posted by meepmeow at 4:23 PM on June 9, 2010
It MIGHT be possible to use the same lawyer - ask the lawyer. Make it very clear that you understand that it's typically not done but that you feel very strongly that your ex-wife's interests and your interests are the same in this matter. The lawyer may ask you to sign something stating that you understand the potential problems and that you explicitly asked to both be represented. (And I agree with meepmeow that bringing a lawyer into the picture doesn't have to make things adversarial - an important part of what lawyers do is making sure you understand the law and how it could affect each of you, you and your ex, in the future. The lawyer can help you think about things that might happen and talk about how you want to handle them.)
posted by kristi at 11:11 AM on June 11, 2010
posted by kristi at 11:11 AM on June 11, 2010
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posted by white_devil at 10:39 AM on June 9, 2010