Protection of equity

[techover]

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

I have tentatively agreed to wait 17 years to collect my share of the equity in the house. This is in the interest of the children. I am going ask for an inflation adjustment to help ensure the money has the same buying power.

I also want to include language that ensures fair delivery based on the reason I am waiting so long. So far I have:

She dies.
The children die
She vacates for more than 30 days (like renting it out)
An intimate partner occupies the house for more than 90 days
She refinaces
She sells
The children are emancipated

What else should I do? 17 years is a long time. So many things could happen.

I suppose there are other things, like felony convivtion that would allow me to win a request for modification.

 

[nextwife]

Is the house free and clear?

A. You DO realize that, unless she finances in her name alone, your credit and borrowing power is ALSO tied up for the next 17 years?

B. If she defaults, you can lose your equity completely?

 

[JETX]

What else should I do?

Ask your LOCAL attorney who presumably knows far more about you and your situation than we do.

 

[mistoffolees]

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

I have tentatively agreed to wait 17 years to collect my share of the equity in the house. This is in the interest of the children. I am going ask for an inflation adjustment to help ensure the money has the same buying power.

I also want to include language that ensures fair delivery based on the reason I am waiting so long. So far I have:

She dies.
The children die
She vacates for more than 30 days (like renting it out)
An intimate partner occupies the house for more than 90 days
She refinaces
She sells
The children are emancipated

What else should I do? 17 years is a long time. So many things could happen.

I suppose there are other things, like felony convivtion that would allow me to win a request for modification.

You have 'tentatively' agreed? If it's not final, I wouldn't do it. You're putting a lot of reasons why you should collect the money now. Drop all of that and give stbx 90 days to pay you your 1/2 of the equity. If they have to sell, that's life.

 

[LdiJ]

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

I have tentatively agreed to wait 17 years to collect my share of the equity in the house. This is in the interest of the children. I am going ask for an inflation adjustment to help ensure the money has the same buying power.

I also want to include language that ensures fair delivery based on the reason I am waiting so long. So far I have:

She dies.
The children die
She vacates for more than 30 days (like renting it out)
An intimate partner occupies the house for more than 90 days
She refinaces
She sells
The children are emancipated

What else should I do? 17 years is a long time. So many things could happen.

I suppose there are other things, like felony convivtion that would allow me to win a request for modification.

I don't think that your plan is going to work. I think its too complicated. I also think that its more than a bit over the top to expect her not to be able to live with a romantic partner for the next 17 years.

What you need is a plan that focuses not on the things that you are listing, but on her ability to refinance and buy you out...with perhaps some fair adjustment on your share in the equity, and a result to happen if she defaults in some way on the payments.

So...(and this is just off the top of my head, as an example)

You agree that in 5 years her financial situation will be reviewed to see if she can refinance the home and buy you out. You agree that your buyout will be XXX dollars (1/2 of the current equity) plus 1/2 of any increased equity that is not due to her paying down the mortgage. You agree that if she is unable to refinance that either 1) the house will be sold, or 2) that you re-review every year or two after that.

You agree that the house will be sold if she defaults on the mortgage payments, or discontinues living in the home, or the children pass away, and that the equity will be split based on the same formula mentioned above.

You may want to include that if she passes away that the home will be sold, using the same formula, and that her share of the equity will be placed in trust for the children.

 

[techover]

Thank you

You helped a lot. 3 weeks of negotiation and the possibility of 8 more is so damn depleting I often contemplate walking away. Leveraging, cussing, insomnia, anger and gut wrenching sorrow has me pleading to any god that will listen for a lasting dose of just plain apathy. I want to go buy a magic maker and a piece of cardboard and fade into obscurity.

Yes moderater, I know, wrong forum, wrong site. Pity me.

 

[techover]

Am I to be removed from the deed by quit claim or do I have to stay on the deed to protect my interest?

 

[nextwife]

A quit claim absolutely does NOT remove your liability for the mortgage. It only removes your recourse and interest in the property.

Staying on the mortgage ties up your credit and borrowing ability even if she never misses a payment. You'd be a fool to quit claim while still on the mortgage. Can she refi you off the mortgage?

Who will be responsible for the payments? How will you protect against late pays or missed payments?

 

[mistoffolees]

A quit claim absolutely does NOT remove your liability for the mortgage. It only removes your recourse and interest in the property.

So....., do NOT sign the quit claim deed until you're off the mortgage.

 

[nextwife]

So....., do NOT sign the quit claim deed until you're off the mortgage.

AMEN to that!

 

[techover]

I am expected to allow myself to be removed from the deed so that she can make decisions regarding the house without me. I am told that no matter what happens my money (35k) will be protected in the agreement.

I am hearing from this thread that there is the separate issue of being removed from the mortgage. My credit will then only reflect my payment history and not be vulnerable to any future mistakes.

She is to make the payments. She cannot refi without improvement to her credit. With this in mind I have offered the agreement read that she buy me out in 7 years either by sell or refi.

I'll hire an attorney to go over it before I sign off. Right now I'm letting her attorney write the decree and present it for my approval. I am trying to proceed with as much good faith as I can muster. Our circumstances call for it, but only if I completely understand what I am risking.

 

[techover]

It appears I am not on the mortgage. . . news to me. Quit deed and done.

 

[nextwife]

And if she defaults, how are you protected? If the house is foreclosed, how do you get your interest out?

You are "told"? By whom? I sure hope you are not taking advice from STBX OR her lawyer. Review both the mortgage AND the note to verify if you name appears.

 

[nextwife]

I am hearing from this thread that there is the separate issue of being removed from the mortgage. My credit will then only reflect my payment history and not be vulnerable to any future mistakes.

You need to be off the mortgage, yes, for that reason, but also because, under the current "credit scoring system" you will remain liable for the entirety of that mortgage debt for the remainder of it's term in the way your credit score is calculated. It will remain as a huge financial liability and could very well affect your ability to buy any sort of home while that mortgage remains open. Mortgage lending today is a whole different animal, and too many family law attorneys are woefully ill informed about how today's credit works. They make client recommendations based on long ago and far away fantasies about the good old days of lending.

 

[mistoffolees]

It appears I am not on the mortgage. . . news to me. Quit deed and done.

It's good that you're not on the mortgage. However, I would not sign the quit claim deed until you have received your payment.

She can make any decisions she wants about the property without having a quit claim. The proper way to do it is that you have an agreement that she owes you $x. At closing, the closing company gives you a check for $x, and you sign a quit claim deed at the same time.

I think you're making a huge mistake, even beyond that. The agreement says that she owes you a fixed amount ($35 K)? And she doesn't have to pay you for $17 years? Do you have any idea what the net present value of $35 K would be? Depending on the inflation factor you use, you're getting way, way less than $35 K. No one knows that the inflation rate will be for 17 years, but it's a good bet that it will be higher than the past few years. It's a really bad idea to say "I will be paid $x in 17 years".

And i will repeat what you've been told. Do NOT take legal advice from your ex or her attorney.