Foreclosure / Divorce Question

[Shayna1]

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

Hello,

I have some questions about an impending foreclosure in a matter of weeks. This is my story:

My husband divorced me in 2008.

Prior to filing divorce, he had taken out a HELOC on the marital property without me knowing, since the property was in his sole name.

As part of the divorce settlement, he was ordered to quit-claim the marital residence to me. I was court-ordered to pay the entire HELOC since he was not given any equity in the property. I was also supposed to refinance the house out of his name.

He quit-claim the residence to me, after which I refinanced the house with a new mortgage. I didn't tell the new mortgage company that I had any other loans on the property, since this HELOC was in his name and not mine, I guess they didn't find out.

I didn't pay off the HELOC even though I had the money after I took out the new mortgage, because I had other bills to pay for myself. Anyway, now my ex-husband is telling me that he has been contacted by the bank (that gave him the HELOC), saying the house is going to be foreclosed.

Can they do this?

What happens to the money owed on the HELOC, does that just go away?

What about my new first mortgage -- if the house goes away, does that mortgage go away as well?

I know it won't go on my credit since the house/HELOC was in his name, but I'm wondering about the other monies owed.

Also, can I sue him for my interest in the house/equity that I would lose in the foreclosure process?

Sorry for all the questions, thanks for reading.

[nextwife]

You are in a MAJOR world of trouble.

The undisclosed HELOC would have moved to first mtg position when you refinanced. That put the new first mtg lenders collateral at risk. Likely you signed an Owner's Affidavit at closing in which you SWORE, under oath, that there were no undisclosed loans, judgments or other adverse matters that would affect loan priority. That means that the title company who insured the loan position of your new mortgage will have to pay a claim, after which they will turn around and sue your butt for recovery. Title company's have deep pockets for legal work. Either they or the new lender will sue you unless you very quickly correct the condition by paying off the HELOC.

Oh, and you will likely lose the house. That mtg is now your FIRST mtg. And, yes, you will have liability because of the fraud issue when you refinanced. The new lender will be owed what they lose.

[Texas Pooh]

Also, can I sue him for my interest in the house/equity that I would lose in the foreclosure process

No, but he can and will sue you for your failure to pay the HELOC loan and the damage that has been done to his credit.

Of course, as noted by nextwife, you will also be sued by the title company and/or your mortgage company, when the house is not sold for enough money to pay off both the first mortgage and the HELOC.

You need to pay the HELOC. today.

[nextwife]

Additionally, a Bankruptcy would likely NOT protect you because of the non dischargability of fraud. Any of the injured parties who suffered a loss due to fraud can request that the resulting debt be treated as a non-dischargable debt.

[Shayna1]

Well, I have no assets, and I get alimony and that's it.

Also, how in the world could my ex-husband sue me for damage to his credit? There's no such law, is there?

And why wouldn't he be responsible for the HELOC since that's in his name, no matter what the court order says.

[nextwife]

Originally Posted by Shayna1

Well, I have no assets, and I get alimony and that's it.

Also, how in the world could my ex-husband sue me for damage to his credit? There's no such law, is there?

And why wouldn't he be responsible for the HELOC since that's in his name, no matter what the court order says.

YOU will be responsible for the HELOC because failure to disclose it messed up the priority of your refinanced loan, in addition to having agreed in your decree to pay it.

You can be sued and garnished. You are rather nonchalant for having potentially committed felony fraud. What sort of loss will your new lender experience if the HELOC forecloses them out? Betcha it's a LOT of money.

You did NOT only default on a loan in his name. Your actions went way beyond being unable (or maybe unwilling) to pay THAT loan. You defrauded the new lender to get the cash out refi - then burned them.