ex-wife foreclosing on our home

[evenflow321]

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

In the divorce with my wife last year she received our condo in the settlement to which I signed a quite claim on the deed over to her. She has now decided that she no longer wants to live in the area but the condo is 70k under water. She is going to foreclose on the condo instead of dealing with the debt even though she has enough assets to keep the condo, even pay the whole thing off (she received a sizable inheritance).

Im being told that just because I signed a quit claim on the condo it does not release me from the financial responsibility. I can not afford to pay the mortgage on the condo. I make much less than my ex-wife does and I have almost no savings, I can not pay the mortgage to try and save my credit.

I feel stuck, I cant afford the place on my own, she refuses to help, and my credit is going to be ruined because of her irresponsibility. Is there anything I can do!?

 

[nextwife]

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

In the divorce with my wife last year she received our condo in the settlement to which I signed a quite claim on the deed over to her. She has now decided that she no longer wants to live in the area but the condo is 70k under water. She is going to foreclose on the condo instead of dealing with the debt even though she has enough assets to keep the condo, even pay the whole thing off (she received a sizable inheritance).

Im being told that just because I signed a quit claim on the condo it does not release me from the financial responsibility. I can not afford to pay the mortgage on the condo. I make much less than my ex-wife does and I have almost no savings, I can not pay the mortgage to try and save my credit.

Another option: See if she'll deed it back to you. You get a roommate (or two), live there and make the payments.

I feel stuck, I cant afford the place on my own, she refuses to help, and my credit is going to be ruined because of her irresponsibility. Is there anything I can do!?

Unless she is the mortgage holder, she CANNOT foreclose.

Do you mean, she intends to default and cause the lender to eventually foreclose? Your quit claim deed has no bearing on your and her continued responsibility for the payments. The lender is NOT a party to your side agreement that she will pay. You should never have quit claimed if you were still on the mortgage. See if you can talk her into working on a short sale.

Another option: get her to quit claim to you. You get a roommate (or two) move in and make the payments.

 

[evenflow321]

Yes she plans to just stop making payments and have the lender enter foreclosure. She tried to do a loan modification but because of her assets she was denied and the bank told her she would be denied the short sale for the same reason. She has hundreds of thousands of dollars in the bank (same bank that holds our mortgage - unless she moved it) and she plans to just default. Im hoping theres a way I could petition the bank or something... It just doesnt seem right that she can have hundreds of thousands of dollars and shes just going to enter foreclosure and walk away...

She says she doesnt care about her credit score because she has enough money to get what she wants without good credit, yet Im screwed.

Yes I know it was foolish of me to sign the quit claim, now... In the agreement it stated that she would take on all financial responsibility and that she was going to continue paying for the condo. I didnt want to be liable for her drunken parties with her friends should someone get injured.

 

[mistoffolees]

Yes she plans to just stop making payments and have the lender enter foreclosure. She tried to do a loan modification but because of her assets she was denied and the bank told her she would be denied the short sale for the same reason. She has hundreds of thousands of dollars in the bank (same bank that holds our mortgage - unless she moved it) and she plans to just default. Im hoping theres a way I could petition the bank or something... It just doesnt seem right that she can have hundreds of thousands of dollars and shes just going to enter foreclosure and walk away...

She says she doesnt care about her credit score because she has enough money to get what she wants without good credit, yet Im screwed.

Since your name is on the mortgage, ask the bank to send you copies of the statements. As soon as she misses a payment, go to court to ask the court to find her in contempt for not keeping up the payments - and damaging your credit. At that point, you can choose to make the payments and then sue her to collect them. Or, you can ask the court to order her to make the payments.

In either event, ask the court to order her to sell the place and make up the difference from her savings or refinance in her name (which would require her to put down additional cash).

In any case, the fact that she has lots of assets works in your favor. You will probably just need to let her know that if she doesn't pay the mortgage, she's still going to be held accountable by the divorce court.

 

[Ohiogal]

IMMEDIATELY go back to court for contempt of court and sue to have her pay off the condo with her sizeable inheritance.

 

[mistoffolees]

IMMEDIATELY go back to court for contempt of court and sue to have her pay off the condo with her sizeable inheritance.

I'll defer to you for your knowledge of Ohio law, but is the court really going to order her to pay off the debt if she doesn't want to?

After she has missed a payment, it becomes a different matter - OP can claim that he has been harmed, but as long as she remains current, OP has no harm and it comes down to asking for a modification of the divorce decree - for which he'd have to show a legitimate reason.

 

[evenflow321]

a copy of the agreement

SECTION 3:

Section 3.1 The residence at *Condo Location* is assigned to Wife in its entirety, along with any assets and debts associated therewith. The assets include but are not limited to the real estate, the residence on the property, the fixtures, and all content of the residence, except for Husband’s separate personal property, and Husband’s share of community personal property. The debts include the mortgage, any line of credit recorded against the property, and any liens against the property. Husband waives any and all claims to reimbursement and any ownership interest associated therewith, including but not limited to any claims for reimbursement pursuant to Moore-Marsden, Watts, Epstein, or other theories of recovery.



Section 3.2 The Parties acknowledge that the family residence has, at present, a negative equity, meaning that the value of the property is worth significantly less than the amount of the mortgage owed against the property. For purposes of this Agreement, the value of the family residence is stipulated to be $XXX,XXX. The Parties stipulate that the current balance of the mortgage is $XXX,XXX, leaving a negative equity of over $XX,000.00.



Section 3.3 The family residence may have to be placed on the market for sale, subject to approval by the lender for a “short sale”, meaning that the lender would agree to accept as full satisfaction for the mortgage the sale price to a new buyer, and forgive the Parties the shortfall between what is paid and what is owed. The Parties acknowledge that this shortfall, if forgiven by the lender, could subject the Parties to federal or state income tax liability for income in the amount of the forgiven debt. The Parties agree that after the MSA has been signed, and Husband has transferred his interest in the family residence to Wife, Wife shall be solely responsible for the decision to keep or sell the family residence, and shall be solely responsible for the mortgage, property taxes, and insurance on the property, as well as any tax consequences associated with her ownership of the property.



Section 3.4 Husband shall sign a Quitclaim Deed, transferring his interest in the family residence to Wife at the time this MSA is signed. Wife shall make her best efforts to remove Husband from the mortgage, and has applied for a loan modification to have the mortgage in her name alone. Both parties acknowledge that this is a matter that rests in the discretion of the mortgage lender. In the event that Wife is not able to remove Husband from the mortgage, Wife shall assume full and sole responsibility for the loan, and shall indemnify and hold Husband harmless with respect to the mortgage.

 

[mistoffolees]

Wife shall make her best efforts to remove Husband from the mortgage, and has applied for a loan modification to have the mortgage in her name alone. Both parties acknowledge that this is a matter that rests in the discretion of the mortgage lender. In the event that Wife is not able to remove Husband from the mortgage, Wife shall assume full and sole responsibility for the loan, and shall indemnify and hold Husband harmless with respect to the mortgage.

Did she actually make an effort to have the loan modified? If not, you can sue her immediately for contempt.

If she really tried and the bank said 'no', then you are going to have a hard time with contempt - until she misses a payment. The real problem with clauses like this is what happens if she ruins your credit. How does she indemnify you for that?

Ohiogal says you can sue right now to force her to pay off the loan (or at least pay enough to refinance in her name, presumably). I would suggest seeing an attorney to ask about that.

 

[evenflow321]

She did try to get a loan modification but of course the bank rejected her. Why would they offer to help her when she had hundreds of thousands of dollars in assets?

I contacted the bank and am having copies of the statements mailed out to me. As of now she is current on the payments. She just learned last week that she was denied the loan mod, so her first missed payment will be this month.

 

[mistoffolees]

She did try to get a loan modification but of course the bank rejected her. Why would they offer to help her when she had hundreds of thousands of dollars in assets?

Then you have a gray area. If she has hundreds of thousands of dollars in the bank which gives her the ability to pay down the mortgage enough to refinance in her name, it is not reasonable to insist that the bank must take a loss on the loan.

It sounds to me like that would be sufficient grounds to go back to your divorce judge and ask for a modification to the original order. But that's just my opinion. Ohiogal is much more knowledgeable in Ohio law.

 

[evenflow321]

not sure why everyone is referring to Ohio law when I stated in the OP that I was in CA. . .

 

[mistoffolees]

not sure why everyone is referring to Ohio law when I stated in the OP that I was in CA. . .

I don't know either - my mistake.

My advice wouldn't change.

 

[nextwife]

He certainly can pursue a court order to require her to refinance him off the mortgage or pay it off, getting him off the mortgage immediately. Or sell and payoff the loan at closing. Being upside down is irrelevent if she has more than sufficient assets to cover her shortfall.

 

[mistoffolees]

He certainly can pursue a court order to require her to refinance him off the mortgage or pay it off, getting him off the mortgage immediately. Or sell and payoff the loan at closing. Being upside down is irrelevent if she has more than sufficient assets to cover her shortfall.

I'm curious why a 10 month old post is popping up again.