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magnus2011

Junior Member
What is the name of your state (only U.S. law)? AZ

A couple married 8 years. 2 kids. House is in "his" name only. House owned 5 years. Married when purchasing house. Wife worked all 8 years. Splitting up. Husband threatens that he will keep the house in divorce. Will courts likely award wife house, part of house, financial standing in house? Or will husband keep it because name is on mortgage?
 


LdiJ

Senior Member
What is the name of your state (only U.S. law)? AZ

A couple married 8 years. 2 kids. House is in "his" name only. House owned 5 years. Married when purchasing house. Wife worked all 8 years. Splitting up. Husband threatens that he will keep the house in divorce. Will courts likely award wife house, part of house, financial standing in house? Or will husband keep it because name is on mortgage?
He would get to keep the house, but the wife would be entitled to 1/2 of the equity since the house was purchased during the marriage. Assuming of course that community (rather than separate) property purchased the house.
 

ecmst12

Senior Member
Does she want to stay in the house? Can she afford to pay for the house on just her income? Does she qualify to get the house refinanced into her name?
 
If she is entitled to half the equity in the house, if the house is underwater,could she be made to pay him half the deficiency?
 

mistoffolees

Senior Member
If she is entitled to half the equity in the house, if the house is underwater,could she be made to pay him half the deficiency?
In theory, yes, but in practice, that rarely happens. It is most likely to happen if they sell the house - then they might split the loss. but if he keeps it, she normally wouldn't have to pay.
 

Bali Hai

Senior Member
What is the name of your state (only U.S. law)? AZ

A couple married 8 years. 2 kids. House is in "his" name only. House owned 5 years. Married when purchasing house. Wife worked all 8 years. Splitting up. Husband threatens that he will keep the house in divorce. Will courts likely award wife house, part of house, financial standing in house? Or will husband keep it because name is on mortgage?
Where is house? In Sedona or Tuson area?
 

nextwife

Senior Member
In theory, yes, but in practice, that rarely happens. It is most likely to happen if they sell the house - then they might split the loss. but if he keeps it, she normally wouldn't have to pay.

If there is negative MARITAL equity, and marital assets to help cover the marital debt, why shouldn't the marital assets be required to be available to make the creditor whole? I am contantly amazed that it is ok to demand part of any POSITIVE assets, but remaining negative equity made the lender's problem. The parties divorce, SPLIT UP THEIR ACCOUNTS, then two or three years later, whomever kept the house wants a short sale with no deficiency and the lender to EAT THE LOSS, WHEN THERE HAD BEEN ASSETS TO COVER IT DURING THE MARRIAGE.
 

mistoffolees

Senior Member
If there is negative MARITAL equity, and marital assets to help cover the marital debt, why shouldn't the marital assets be required to be available to make the creditor whole? I am contantly amazed that it is ok to demand part of any POSITIVE assets, but remaining negative equity made the lender's problem. The parties divorce, SPLIT UP THEIR ACCOUNTS, then two or three years later, whomever kept the house wants a short sale with no deficiency and the lender to EAT THE LOSS, WHEN THERE HAD BEEN ASSETS TO COVER IT DURING THE MARRIAGE.
I wouldn't say that it NEVER happens, but it's very unusual in my experience.

I don't know the rationale, but I suspect that it's perceived that the current housing slump is temporary. At the time the home was purchased, the couple thought it was worth the asking price. Now, it isn't. At some time in the future, the price will presumably have recovered so that the home is in the black again. Thus, if one of the couple keeps the home, then the current shortfall is only temporary and does not constitute any loss of cash.

Forcing the leaving spouse to pay 1/2 of the underwater amount would amount to a windfall to the staying spouse after property values recover. Plus, of course, the fact that actually determining the amount that it's under water is difficult. Most homes that are under water had property values that changed quickly, and possibly fluctuated, so it's not easy. And many are only slightly under water, so the numbers are not often as large as the potential positive equity numbers.

Don't get me wrong - I see your point and it is valid. It's just that there is an argument to me made on the other side, as well. Plus, the fact that I have rarely seen the negative equity used in the calculations in my experience.
 

LdiJ

Senior Member
If there is negative MARITAL equity, and marital assets to help cover the marital debt, why shouldn't the marital assets be required to be available to make the creditor whole? I am contantly amazed that it is ok to demand part of any POSITIVE assets, but remaining negative equity made the lender's problem. The parties divorce, SPLIT UP THEIR ACCOUNTS, then two or three years later, whomever kept the house wants a short sale with no deficiency and the lender to EAT THE LOSS, WHEN THERE HAD BEEN ASSETS TO COVER IT DURING THE MARRIAGE.
That is how you would like to see it work Nexie, but that is not the way that it generally works in the real world. In the real world, whoever keeps the house keeps the debt associated with the house. In addition, in the real world very few people who are upside down on their house have any real assets that could be used to preserve the house...even in their prior marriage.
 

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