Dealing with debt and refinance issues

[Barry52F]

What is the name of your state (only U.S. law)? Texas

My ex and I divorced Aug 2008. The ex didn't want the house, and very little if any equity existed in it, so we agreed I would take the house. In the final decree, under debt, it stated: (names removed)

IT IS ORDERED AND DECREED that the husband, ME, shall pay, as a part of the division of the estate of the parties, and shall indemnify
and hold the wife and her property harmless from any failure to so discharge, these items:
H-1. The balance due, including principal, interest, tax, and insurance escrow, on the promissory note executed by ME and HER, in the original principal sum, secured by deed of trust on the real property awarded in this decree to the husband, in the Deed of Trust Records of Tarrant County, Texas.​

There is nothing about refinancing in the decree. I have been paying the mortgage every month, no late payments or anything. Well, the ex is wanting to purchase a house and was denied a loan because her debt-to-income ratio is too high, since her name is still on the mortgage for my house. She called me and wants me to refinance.

First question: Can she force me to refinance? Or will she have to get a lawyer and take me to court?

I'm not trying to be mean, as we had a very amicable split, but she has not fully met her obligations regarding credit card debt. She was supposed to take care of the debt on a credit card that is in my name (as most of the debt was in my name at the time of divorce). So that my credit is not damaged, I have continued to pay the minimum and she has sent me a small check each month, but not enough to even pay the minimum payment. Therefore, I'm going to use this reasoning with her: You pay off the credit card debt that you were supposed to, and I'll see about refinancing.

Any thoughts? My thinking is that if she is financially in a position to consider buying a house, she needs to pay off the $7000 she owes on my credit card. Otherwise, I guess I'll continue to take her piddlely $25 a month for the next 23 years

 

[LdiJ]

What is the name of your state (only U.S. law)? Texas

My ex and I divorced Aug 2008. The ex didn't want the house, and very little if any equity existed in it, so we agreed I would take the house. In the final decree, under debt, it stated: (names removed)

IT IS ORDERED AND DECREED that the husband, ME, shall pay, as a part of the division of the estate of the parties, and shall indemnify
and hold the wife and her property harmless from any failure to so discharge, these items:
H-1. The balance due, including principal, interest, tax, and insurance escrow, on the promissory note executed by ME and HER, in the original principal sum, secured by deed of trust on the real property awarded in this decree to the husband, in the Deed of Trust Records of Tarrant County, Texas.​

There is nothing about refinancing in the decree. I have been paying the mortgage every month, no late payments or anything. Well, the ex is wanting to purchase a house and was denied a loan because her debt-to-income ratio is too high, since her name is still on the mortgage for my house. She called me and wants me to refinance.

First question: Can she force me to refinance? Or will she have to get a lawyer and take me to court?

I'm not trying to be mean, as we had a very amicable split, but she has not fully met her obligations regarding credit card debt. She was supposed to take care of the debt on a credit card that is in my name (as most of the debt was in my name at the time of divorce). So that my credit is not damaged, I have continued to pay the minimum and she has sent me a small check each month, but not enough to even pay the minimum payment. Therefore, I'm going to use this reasoning with her: You pay off the credit card debt that you were supposed to, and I'll see about refinancing.

Any thoughts? My thinking is that if she is financially in a position to consider buying a house, she needs to pay off the $7000 she owes on my credit card. Otherwise, I guess I'll continue to take her piddlely $25 a month for the next 23 years

While I agree that she needs to pony up on the credit card, tying up her credit so that she cannot buy a house is a much huger deal. You should at least check into refinancing so that you know for certain whether or not you can do it at this point. If you cannot do it because there is not enough equity or you cannot qualify for the loan on your own, then the whole thing is a moot point.

 

[mistoffolees]

What is the name of your state (only U.S. law)? Texas

My ex and I divorced Aug 2008. The ex didn't want the house, and very little if any equity existed in it, so we agreed I would take the house. In the final decree, under debt, it stated: (names removed)

IT IS ORDERED AND DECREED that the husband, ME, shall pay, as a part of the division of the estate of the parties, and shall indemnify
and hold the wife and her property harmless from any failure to so discharge, these items:
H-1. The balance due, including principal, interest, tax, and insurance escrow, on the promissory note executed by ME and HER, in the original principal sum, secured by deed of trust on the real property awarded in this decree to the husband, in the Deed of Trust Records of Tarrant County, Texas.​

There is nothing about refinancing in the decree. I have been paying the mortgage every month, no late payments or anything. Well, the ex is wanting to purchase a house and was denied a loan because her debt-to-income ratio is too high, since her name is still on the mortgage for my house. She called me and wants me to refinance.

First question: Can she force me to refinance? Or will she have to get a lawyer and take me to court?

I'm not trying to be mean, as we had a very amicable split, but she has not fully met her obligations regarding credit card debt. She was supposed to take care of the debt on a credit card that is in my name (as most of the debt was in my name at the time of divorce). So that my credit is not damaged, I have continued to pay the minimum and she has sent me a small check each month, but not enough to even pay the minimum payment. Therefore, I'm going to use this reasoning with her: You pay off the credit card debt that you were supposed to, and I'll see about refinancing.

Any thoughts? My thinking is that if she is financially in a position to consider buying a house, she needs to pay off the $7000 she owes on my credit card. Otherwise, I guess I'll continue to take her piddlely $25 a month for the next 23 years

Basically, at this point, she can not make you refinance.

HOWEVER, she can go back to court to ask the judge to order you to refinance. At that time, you can ask the judge to order her to pay the $7 K she owes you.

The problem is that if there's little equity, it will be difficult to refinance. In most cases, you need at least 20% equity (although there are exceptions). You may have trouble refinancing. If you think it will be enough, you could ask the judge to order her to repay the $7 K and then give you some time (perhaps 6 months) to arrange the refinancing. Perhaps with that money plus whatever else you can come up with you might be able to arrange financing.

I would start talking with banks right away because one way or the other, you're going to be refinancing so it's worth getting the process underway. Worst case, you would be able to tell the judge you had already tried and were rejected - which might make it harder for him to order a refinancing.

 

[Ohiogal]

Actually it is not moot. He would have to get the mortgage out of her name because if he does not then that is NOT holding her harmless -- she is suffering harm by having her credit tied up in the house that he is to be SOLELY and wholly responsible for.

 

[LdiJ]

Actually it is not moot. He would have to get the mortgage out of her name because if he does not then that is NOT holding her harmless -- she is suffering harm by having her credit tied up in the house that he is to be SOLELY and wholly responsible for.

If he cannot get a loan however, the only option is selling to get her name off the mortgage. If there wasn't enough equity in the home a year ago to split anything, selling could mean a short sale. A short sale would damage her credit and she STILL would not be able to buy a home...possibly for a very long time.

 

[Ohiogal]

If he cannot get a loan however, the only option is selling to get her name off the mortgage. If there wasn't enough equity in the home a year ago to split anything, selling could mean a short sale. A short sale would damage her credit and she STILL would not be able to buy a home...possibly for a very long time.

A short sale would NOT be the only solution. HE could come to the table as the seller with MONEY. That is definitely a possibility. He sells it and makes up the difference with cold hard cash. That would NOT harm her credit.

 

[LdiJ]

A short sale would NOT be the only solution. HE could come to the table as the seller with MONEY. That is definitely a possibility. He sells it and makes up the difference with cold hard cash. That would NOT harm her credit.

Yes, that is true, however how many homeowners these days have any cash available to bring to a closing table?...or even any options to obtain the cash?

Particularly homeowners who have only been divorced for a year and presumably had to split marital assets at that time?

I do agree that he should refinance if he can. It makes sense from more standpoints than just the tying up of her credit. As long as she is still on the house liens could be placed against it due to debts of her or other liabilities of hers. He may be able to eventually get any liens removed, but he could go through a lot of hassle to do so.

My point is simply that if a short sale happened, and he had no cash to bring to the table, that her credit would be damaged worse than her current debt to ratio problem.

 

[mistoffolees]

Actually it is not moot. He would have to get the mortgage out of her name because if he does not then that is NOT holding her harmless -- she is suffering harm by having her credit tied up in the house that he is to be SOLELY and wholly responsible for.

The problem is going to be quantifying that.

It's easy to justify an order for him to refinance. That would clearly get her name off the mortgage and clear up her debt to income ratio. But if he can't refinance or the judge refuses to order it, how do you determine how much harm she is suffering so that she can ask to be reimbursed? Similarly, how do you determine how much harm occurs if he fails to pay or there's a short sale or whatever?

Bottom Line (it's too late for OP, but for anyone else reading this):
In a divorce, the person keeping the home should ALWAYS refinance in their own name (using their own parent, brother, sister, etc as a co-borrower is OK, but stbx MUST be off the mortgage) as quickly as possible after the mortgage. If that is not possible, the house should be sold even if the parties have to live in a rental for a while.

Keeping both parties on the mortgage is a sure formula for problem and expense down the road. It also leads to issues like this one where one party can't buy a house even though they could afford it.

This part is personal opinion, but I would argue that even a short sale is preferable than the problems unless the couple is completely aware of what they're doing, confident that the person keeping the house will pay, and that the person who doesn't get the house doesn't need to buy one right away (or can afford to buy even with the other home on their credit history). The decision to keep the mortgage should be an absolute last resort and only works if both parties know EXACTLY what they're getting into.

 

[Golfball]

Or if it's the only way for one party to get what they want, and the other party is ok w/ that.

Originally in my divorce, my X wanted me to re-fi. I let it be known that I wanted to sell, as I didn't want the house any more, either. (Too much house for me, and I was wanting to leave open the possibility of moving out of state. Which I did.) My X wanted money, and wanted it now, so she was faced with two options:

1) Remain on the mortgage, get some cash now (after she had met other conditions, primarily getting me off her car note, because there would be no way in hell I could swing a refi with her carnote on my credit), and quitclaim the house. I put the house up for sale, with a deadline for me to re-fi or sell. I get all the proceeds when it does sell.
2) Force a refi immediately, but have the costs of the refi deducted from the equity to be split, which would have left her (after all the other costs of sale, since I was intending to sell) with nothing.

She chose option 1. She wanted money, she wanted it now, option 2 wouldn't have given her any money, and I'm guessing she figured she wouldn't be buying a house anytime soon. (Which she didn't. And given what I can gather of the state of her new hubby's credit, I'm guessing that still won't be the case.)

I wasn't expecting the magnitude of the real estate bust (so I ended up taking a bath on it, but I didn't have to bring money to closing, which was good, because I would have been hard pressed to swing that), but an approved offer (by the bank) on the house was pending at the deadline (with an approved refi on my part waiting in the background if the offer fell through), and the house closed two weeks later. (So any damage my X would have suffered was minimal. Even if she had sued the day after the deadline passed, I don't think she would have been able to justify an emergency ex parte order, and by the time a response would have been due, the issue would be moot.)

 

[mickbali123]

Hello everyone.
I have some refinance issue which create problem for me. Will any help?.

 

[LdiJ]

Hello everyone.
I have some refinance issue which create problem for me. Will any help?.

Please start your own thread to ask your questions, rather than posting to an old, dead thread.