Marital home that is "underwater"

[crazyeights]

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

If or when we are divorced, can the judge rule that our house be sold inspite the fact that we will probably not get what we owe, at this time anyways?

If so, who would be liable for the difference? My name is not on the loan but I am not sure if this is an issue or not.

Also, someone told me that there was a new law passed in Mi. that basically states the the higher earner must take the obligation in this circumstance. Anyone know of this?

Thanks for any info!!

 

[mistoffolees]

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

If or when we are divorced, can the judge rule that our house be sold inspite the fact that we will probably not get what we owe, at this time anyways?

Yes. If the two of you can't agree on one person keeping the house, the judge will likely order the house to be sold and you will likely be jointly responsible for the shortfall even though your name isn't on the mortgage (technically, stbx would be responsible to the mortgage company since only his name is on the mortgage, but the court could order you to reimburse him for 1/2).

Either of you could keep the house, though, as long as you meet 3 conditions:
1. The other person must agree (or, if the other person can't agree, you need to get a court order).
2. The person keeping the house must pay the other person 1/2 of the equity. Since it's underwater, that shouldn't be an issue. However, since you're in an equitable distribution state, I guess it's possible (although very unlikely) that the court could order the person keeping the house to reimburse stbx for some amount, anyway).
3. The person keeping the house must be able to refinance in their name which will probably be impossible for an underwater mortgage unless they come up with significant additional cash. This is not strictly necessary - stbx could allow the mortgage to stay in his name and for you to keep the house, but that would be a foolish thing to do.

 

[LdiJ]

Yes. If the two of you can't agree on one person keeping the house, the judge will likely order the house to be sold and you will likely be jointly responsible for the shortfall even though your name isn't on the mortgage (technically, stbx would be responsible to the mortgage company since only his name is on the mortgage, but the court could order you to reimburse him for 1/2).

Either of you could keep the house, though, as long as you meet 3 conditions:
1. The other person must agree (or, if the other person can't agree, you need to get a court order).
2. The person keeping the house must pay the other person 1/2 of the equity. Since it's underwater, that shouldn't be an issue. However, since you're in an equitable distribution state, I guess it's possible (although very unlikely) that the court could order the person keeping the house to reimburse stbx for some amount, anyway).
3. The person keeping the house must be able to refinance in their name which will probably be impossible for an underwater mortgage unless they come up with significant additional cash. This is not strictly necessary - stbx could allow the mortgage to stay in his name and for you to keep the house, but that would be a foolish thing to do.

Of course there is one other option...and that is that stbx, whose name is the only one on the house, could simply keep the house. He wouldn't have to refinance anything.

A judge certainly wouldn't argue with that...and in fact probably would rule against the OP if she was opposed to him keeping the house.

 

[crazyeights]

Oh boy.....Without sounding desperate or deceiving, if this does happen, I must say that I just might have to look at some "manuevering" (for the lack of a better word) if there is any to be had.

Gosh, I know this sounds awful but I simply could not afford to pay 1/2 of the loss on this house. I would quite essentially be put in the poor house along with my girls and so would probably their father, for the time being that is. I'm still trying to find a job and would like to go to school but no job is going to help me in the time that I would need it and I couldn't get a mortgage right now if I tried. Credit is excellent, just no job for the last 13 years. Boy, I just want to cry sometimes.

I wouldn't have any problem letting him keep the house. The problem is though, that after CS, SS and all the bills, he would not be able to afford it either.

All that comes to mind is bankruptcy?, foreclosure?, being forced to live together until the house can sell? Could he ask the judge for custody to make affording this house more possible for him? Did I say that I wanted to cry!! Oh, boy, divorce in this day and age is truly depressing. soooo

 

[LdiJ]

Oh boy.....Without sounding desperate or deceiving, if this does happen, I must say that I just might have to look at some "manuevering" (for the lack of a better word) if there is any to be had.

Gosh, I know this sounds awful but I simply could not afford to pay 1/2 of the loss on this house. I would quite essentially be put in the poor house along with my girls and so would probably their father, for the time being that is. I'm still trying to find a job and would like to go to school but no job is going to help me in the time that I would need it and I couldn't get a mortgage right now if I tried. Credit is excellent, just no job for the last 13 years. Boy, I just want to cry sometimes.

I wouldn't have any problem letting him keep the house. The problem is though, that after CS, SS and all the bills, he would not be able to afford it either.

All that comes to mind is bankruptcy?, foreclosure?, being forced to live together until the house can sell? Could he ask the judge for custody to make affording this house more possible for him? Did I say that I wanted to cry!! Oh, boy, divorce in this day and age is truly depressing. soooo

The lender wouldn't necessarily try to hold you responsible for the short sale, and it sure sounds like a short sale is what is needed.

Part of the problem is people buying more house than they can legitimately afford...or refinancing more than they can legitimately refinance.

 

[crazyeights]

The lender wouldn't necessarily try to hold you responsible for the short sale, and it sure sounds like a short sale is what is needed.

Part of the problem is people buying more house than they can legitimately afford...or refinancing more than they can legitimately refinance.

Agreed but in this case, he decided to buy us a new house and then decide to divorce. I think that he is going through a MLC or something. Anyways, because of his decision, we will also be out the 50k that we put down which would of helped me out tremendously. All irrevelant I know. OMGosh, what the heck was I thinking? Who put those blinders on me when I wasn't looking???

Ya know, I have been reading here alot and have noticed some real sarcasim given to sahm's and their situations (thanks for not beating up on me btw). In these thoughts, I wondered why sahm are targeted as they are and don't these people realize that when someone does post a problem, that they are also hurting a great deal? If I was told that i needed to protect myself by getting a degree or meaningful employment, I wouldn't have thought anything of it. In my mind, I was already working, doing my part in the union. And not only that, with the way he worked and went to school, there wasn't enough hours left over to speak of for me to go to school etc. But with what I know now, I wish that I wasn't so naive. I have had the thoughts of visiting any SAHM message boards I could find to "warn of the dangers" (particularly how they could be frowned upon in a future divorce situation because they did not work outside the home) but then I remember; they probably wouldn't listen to me either.

Where's the spider? My tangled web has been weaved!

 

[LdiJ]

Agreed but in this case, he decided to buy us a new house and then decide to divorce. I think that he is going through a MLC or something. Anyways, because of his decision, we will also be out the 50k that we put down which would of helped me out tremendously. All irrevelant I know. OMGosh, what the heck was I thinking? Who put those blinders on me when I wasn't looking???

Ya know, I have been reading here alot and have noticed some real sarcasim given to sahm's and their situations (thanks for not beating up on me btw). In these thoughts, I wondered why sahm are targeted as they are and don't these people realize that when someone does post a problem, that they are also hurting a great deal? If I was told that i needed to protect myself by getting a degree or meaningful employment, I wouldn't have thought anything of it. In my mind, I was already working, doing my part in the union. And not only that, with the way he worked and went to school, there wasn't enough hours left over to speak of for me to go to school etc. But with what I know now, I wish that I wasn't so naive. I have had the thoughts of visiting any SAHM message boards I could find to "warn of the dangers" (particularly how they could be frowned upon in a future divorce situation because they did not work outside the home) but then I remember; they probably wouldn't listen to me either.

Where's the spider? My tangled web has been weaved!

If you put 50k down, fairly recently, then how can you be underwater on the loan? Are you sure that you are under water on the loan, or is that what your stbx is telling you?

By the way, that's kind of what my ex did to me. He insisted we buy a home, spent ungodly amounts of money remodeling it, and within six months of buying the house, decided that he couldn't handle being a family man anymore. It was kind of an early midlife crisis for him.

Luckily though, I could handle the mortgage without his help. I had insisted that we purchase way less home than we could have purchased and I was so relieved that I did.

 

[crazyeights]

If you put 50k down, fairly recently, then how can you be underwater on the loan? Are you sure that you are under water on the loan, or is that what your stbx is telling you?

By the way, that's kind of what my ex did to me. He insisted we buy a home, spent ungodly amounts of money remodeling it, and within six months of buying the house, decided that he couldn't handle being a family man anymore. It was kind of an early midlife crisis for him.

Luckily though, I could handle the mortgage without his help. I had insisted that we purchase way less home than we could have purchased and I was so relieved that I did.

We knew, when we bought, that we were taking the risk of market declining even further. This wasn't an issue because we planne don being here until we couldn't climb stairs any longer. While we didn't believe and I cannot know for sure, that we'd be this far underwater. From current listings, to what has been sold (after more than a year on the market), things are not looking good at all. A home exactly like mine but less 600 sq ft, sold (took a little less than a year to sell) in the 150K range, another home currently (for more than a year) on the market with 300 less sq ft is listed at 169k. We bought at 240k and thought we were getting a good deal as the original purchase was around 310k. I spoke to my realtor and she said we would be very lucky to get what we owe right now.

So actually, it is me who thinks this based on the above mentioned. He really doesn't keep an eye on things like this so he really doesn't know. He does think that we could get the mortgage paid off plus some. It don't think that it looks that good. And then there is the issue of the girls. I know that they have to face reality here also but geez, how fair is it to them to be moved here away from all their friends, look forward to going to new schools only to be pulled away again. My heart breaks for them, that is for certain.

I went through some tax scenarios. Your story has have given me a new determination to try to make it here. It will be very tight but by God, it just might be worth it. Although, I don't like the fact that he will be able to continue to tell me that I am living in a "palace" while he is living (wherever). Regardless, I do have much to figure out. I wish the monkey wrenches would stay in the garage for a little while!!!