Negative equity

[jrbaldwin]

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

My STBE moved out of our marital home where both our names are on the loan. In the current house market the home has appraised for less than we owe on it. I can afford to stay in the home and make all the agreed upon support payments but she wants me to refinance removing her name from the loan as she cannot get any credit cards.

How do we solve this issue, I have been approved to refinance the home in order to get her name off of the loan but then I'm assuming the risk and she gets to walk.

Any suggestions?

[nextwife]

IF it is upside down I can't imagine that a lender would close on such a refi.

Your best bet is to sell the home and split responsibility for the shortfall.

[LdiJ]

Originally Posted by jrbaldwin

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

My STBE moved out of our marital home where both our names are on the loan. In the current house market the home has appraised for less than we owe on it. I can afford to stay in the home and make all the agreed upon support payments but she wants me to refinance removing her name from the loan as she cannot get any credit cards.

How do we solve this issue, I have been approved to refinance the home in order to get her name off of the loan but then I'm assuming the risk and she gets to walk.

Any suggestions?

If you have been approved to refinance then I don't believe you that the home has appraised for less than the loan. There is no mortgage company today that would approve a refinance if the appraisal is less than the loan.

However...if you get to keep the home and she gets to walk, that's fair. You have a place to live, you get the tax break for home ownership, and when the housing market recovers you will benefit.

If you don't want to assume the risk you can insist that the house be sold, and you can accept whatever loss/gain might happen at this time.