bad credit after divorce

[Rachel T]

What is the name of your state? TX

I have been divorced for 4 years. My ex husband got the house since I knew that I would not be able to afford it on my own. My name is still on the mortgage and it is affecting my credit. I do have a letter from the court saying that I should be absolved from any action if he were to be delinquent in payments etc. (my name wont be removed from the note til he sells or refinances is what I was told) Now I am remarried and we are trying to rent a house til we can build up our nest egg to buy. What can I do to clean up the credit? Will the letter be enough? Will the mortgage company take me off the note with the letter? Help!!!


I posted this in another forum this morning and they haven't replied on any posting on the first page! Was hoping I could get help in this forum! : )

 

[penelope10]

Have you tried calling the mortgage company yourself? You have to remember that the mortgage company was not a party to the divorce. They will probably take the stand that legally a divorce court does not have the power to absolve any contractual obligation you might have with them...

 

[Rachel T]

So, everyone that divorces is still obligated to the house??? I must have some recourse!! Grrrrr! I will most definitely contact the mortgage company though, thanks!

 

[escape2paradise]

Typically one party or the other refinances the house in their own name. Thus relieving the party that no longer has an interest in the home. If for whatever reason neither party is able to get financing in their own name the house should have been sold.

 

[nextwife]

So, everyone that divorces is still obligated to the house??? I must have some recourse!! Grrrrr! I will most definitely contact the mortgage company though, thanks!

No, just everybody that divorces without establishing a provision for the existing mortgage to be paid off via either a sale or a refi is still obligated under the mortgage.

And there is no point contacting the lender. You entered into an agreement when they gave you the loan. They have no obligation or incentive to release you. The status of your relationship is not their problem. They underwrote the loan based upon you and he together. They will not release you until the loan is released. I work in the lending/real estate industry.

The problem is that too many family law attorneys know squat about how mortgage scores are affected by open mortgages, and ill advise their clients.

 

[LdiJ]

You could try taking it back to court to get the judge to order him to refinance the house immediately. That may or may not work, but it probably would be worth a try. Its about your only option.

Did your divorce decree address ownership of the house, or was it silent on the issue?

 

[Rachel T]

The decree did address ownership of the house. He didn't have a lot of money himself, and he couldn't afford to pay me out right then and there, so they gave him x amount of weeks to pay me my half of the equity accrued up to that point. (If he didn't pay in the allowed time, he was going to owe me an amount equal to the original amount owed times x percent and it would accrue interest the longer he took to pay.) He wound up paying me in the allotted time. At that time, I was given a letter, I forget the proper name for it, but supposedly it was to absolve me of any problems if and when they came up.

 

[Ohiogal]

Why is this in CHILD CUSTODY?????????????

 

[Rachel T]

Ldij,
I also have a Special Warranty Deed, and a Deed of Trust to Secure Assumption. What can these do for me?

 

[LdiJ]

Ldij,
I also have a Special Warranty Deed, and a Deed of Trust to Secure Assumption. What can these do for me?

Take all of your paperwork and get a consult with a local attorney. Seriously, you need advice from someone who can read the paperwork.

 

[Rachel T]

Thank you! I will do just that!

 

[2Mistakes]

You could try taking it back to court to get the judge to order him to refinance the house immediately. That may or may not work, but it probably would be worth a try. Its about your only option.

Did your divorce decree address ownership of the house, or was it silent on the issue?

Credit-wise, he may not be able to refi on his own. A judge can order him to refi all day long, but if no lender will finance him, there isn't much that can be done.

 

[Rachel T]

Someone mentioned to me today a "quit claim deed." This is not included in my divorce. Is this essential to give up my interest in the house?

 

[mom428]

Someone mentioned to me today a "quit claim deed." This is not included in my divorce. Is this essential to give up my interest in the house?

If you sign a "quit claim deed" it will release you ONLY from an ownership interest in the property but NOT the mortgage. It has nothing to do with your mortgage only the deed of the property.

If it were me, I would only sign that during the closing of your EX's refinance and not before. If you sign that, and he doesn't refinance, you lose any right to the property, but you will still be responsible for the mortgage.

 

[Rachel T]

Okay, well, I have not signed such a document, nor have I even seen one. Whew!! Thank you so much for your response.