Served Papers for Contempt

[bambi66]

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

I was divorced in Nov, 2007. In the decree it states that he must make reasonable efforts to get a credit card out of my name and show me proof of such. I then had to make a reasonable effort to refinance the house out of his name. No timeline was given for either effort. I received his documentation in Oct, 2008 and started my attempts to find financing for the home. Due to the housing market, I don't have enough equity in the home to refinance at this time.
I was served papers last night for contempt due to not getting the home refinanced. They are asking for proof of my attempts. How would I prove who I talked to and when? I do have my notes with dates (no year), names and phone numbers but that is all I have. Will this work as proof? I have made 3 attempts to do this (Oct, 08, June, 09 and Feb, 10).
Do I need to respond? The papers have a court date of May 28. What is my next step?
Thanks in advance for any assistance provided.

 

[Ohiogal]

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

I was divorced in Nov, 2007. In the decree it states that he must make reasonable efforts to get a credit card out of my name and show me proof of such. I then had to make a reasonable effort to refinance the house out of his name. No timeline was given for either effort. I received his documentation in Oct, 2008 and started my attempts to find financing for the home. Due to the housing market, I don't have enough equity in the home to refinance at this time.
I was served papers last night for contempt due to not getting the home refinanced. They are asking for proof of my attempts. How would I prove who I talked to and when? I do have my notes with dates (no year), names and phone numbers but that is all I have. Will this work as proof? I have made 3 attempts to do this (Oct, 08, June, 09 and Feb, 10).
Do I need to respond? The papers have a court date of May 28. What is my next step?
Thanks in advance for any assistance provided.

So you have denial letters showing you have been toward down for a refinance of the mortgage? Or did you just ask questions and not attempt to refinance?

 

[stealth2]

Yes, you should respond. Did you file any loan applications, or did you just call a few people? It really doesn't sound as though you made a huge effort, to be honest. Did you communicate to him the difficulties you were having finding financing?

I would expect the judge to order the house sold. You may also be held responsible for his legal fees for having to take you to court.

 

[bambi66]

I did not apply because the lenders stated that I don't have enough equity to refinance. The realtor also told me based on the current market I couldn't even sell it for what I owe. I don't owe him any money and he has already signed the quit claim. I did communicate the problems to him in June 09. He is not using a lawyer.
Any options now for me?

 

[bambi66]

I don't know if it matters, but I had the financing secure and a closing date set prior to finalizing our divorce and he backed out of that deal so I had to cancel and lost the application and appraisal fees.

 

[mistoffolees]

I don't know if it matters, but I had the financing secure and a closing date set prior to finalizing our divorce and he backed out of that deal so I had to cancel and lost the application and appraisal fees.

Not relevant. You were ordered in the divorce to make an effort to refinance, so anything that happened before the divorce doesn't matter.

I did not apply because the lenders stated that I don't have enough equity to refinance. The realtor also told me based on the current market I couldn't even sell it for what I owe. I don't owe him any money and he has already signed the quit claim. I did communicate the problems to him in June 09. He is not using a lawyer.
Any options now for me?

Then according to the evidence available, you did not make an effort to refinance unless you recorded the phone calls (assuming that's legal in your state). Even then, it's questionable.

Your action will depend on the exact wording of the decree. If it truly says that you simply have to make a reasonable effort to refinance, then you'd better do so now. Fill out some mortgage applications, make an appointment with a mortgage broker (and ask the broker for a letter saying that you met to discuss your mortgage application), etc. Then you'll be able to show the court that you did make a reasonable effort (you might even get approved).

If the wording is different (if it says you actually have to refinance, for example), then you may have to sell the house if you can't refinance it.

 

[nextwife]

I did not apply because the lenders stated that I don't have enough equity to refinance. The realtor also told me based on the current market I couldn't even sell it for what I owe. I don't owe him any money and he has already signed the quit claim. I did communicate the problems to him in June 09. He is not using a lawyer.
Any options now for me?

What about increasing your equity by adding some cash to the deal? So the LTV is more palatable to the lender?

 

[mistoffolees]

What about increasing your equity by adding some cash to the deal? So the LTV is more palatable to the lender?

Always an option. That is also an indication of why the exact wording of the decree matters in determining whether OP is in contempt.

 

[bambi66]

Unfortunately, I don't have any disposable cash to help with the LTV.
The exact wording is "Petitioner (me) is to make a reasonable effort to refinance the home to relieve the Respondent (him) of the debt."
Should I get a letter for the lender stating I don't have the equity to refinance at this time? Would that be enough proof?
Thanks

 

[mistoffolees]

Unfortunately, I don't have any disposable cash to help with the LTV.
The exact wording is "Petitioner (me) is to make a reasonable effort to refinance the home to relieve the Respondent (him) of the debt."
Should I get a letter for the lender stating I don't have the equity to refinance at this time? Would that be enough proof?
Thanks

I would say that you should get evidence that you've made a reasonable effort because that's what your court order says. I would not want to tell you what the court would think is reasonable, but I personally would not think that contacting a single bank is a reasonable effort.

If I were attempting to refinance (even without a court order), I would contact 3 or 4 banks, preferably in writing and probably at least a preliminary assessment from a couple.

The catch-22, though, is that by going through the process, you may actually hurt your chances of refinancing. Additional searches of your credit history can reflect negatively. However, that's not something you can control and you just can't ignore the court order because of it.

 

[LdiJ]

I would say that you should get evidence that you've made a reasonable effort because that's what your court order says. I would not want to tell you what the court would think is reasonable, but I personally would not think that contacting a single bank is a reasonable effort.

If I were attempting to refinance (even without a court order), I would contact 3 or 4 banks, preferably in writing and probably at least a preliminary assessment from a couple.

The catch-22, though, is that by going through the process, you may actually hurt your chances of refinancing. Additional searches of your credit history can reflect negatively. However, that's not something you can control and you just can't ignore the court order because of it.

I am not sure that I completely agree.

Since she is being told that she cannot even sell the house for what she owes on it, she is clearly upside down on the house. It is common knowledge that a lender is not going to loan more than the house is worth. Therefore, its obvious that she cannot refinance.

She should however talk to her ex. If the judge orders the house sold, any short sale is going to have a negative impact on his credit. Quite frankly, in my opinon that would be worse than having his credit tied up for another couple of years until she builds more equity and the market has time to recover.

 

[mistoffolees]

I am not sure that I completely agree.

Since she is being told that she cannot even sell the house for what she owes on it, she is clearly upside down on the house. It is common knowledge that a lender is not going to loan more than the house is worth. Therefore, its obvious that she cannot refinance.

The problem is that it's a court ORDER, not a request. She has an order to make a reasonable effort to refinance. One phone call to one bank is not likely to be considered a reasonable effort.

Your comments are entirely true - and a very good reason why people shouldn't put orders that don't make sense into divorce decrees, but the order is there so she has to follow it.

Now, she can hope that at her contempt hearing, the judge will accept that as 'reasonable effort', but it seems that there's no reason for her not to do as I said - make a formal effort to refinance and obtain documentation.

 

[LdiJ]

The problem is that it's a court ORDER, not a request. She has an order to make a reasonable effort to refinance. One phone call to one bank is not likely to be considered a reasonable effort.

Your comments are entirely true - and a very good reason why people shouldn't put orders that don't make sense into divorce decrees, but the order is there so she has to follow it.

Now, she can hope that at her contempt hearing, the judge will accept that as 'reasonable effort', but it seems that there's no reason for her not to do as I said - make a formal effort to refinance and obtain documentation.

I would agree with you if there was enough equity in the home to allow a refinance to happen....for example if her credit was a little shaky and she had to work extra hard to get a lender to give her a chance.

However, this is one of those cases where if there isn't enough equity, there isn't enough equity. She could go to 12 lenders and the answer would be the same.

There also isn't a time limit in the court orders.

If it were me, I would go into court with a current appraisal of the home, and a statement showing the balance due on the mortgage, and let the judge see that that is why she cannot refinance at this time.

Its also quite possible that her ex does not realize that a judge cannot order a lender to give her a loan, and also doesn't understand what a short sale will do to his credit....therefore it would behoove her to explain that to him.

 

[Ohiogal]

I am not sure that I completely agree.

Since she is being told that she cannot even sell the house for what she owes on it, she is clearly upside down on the house. It is common knowledge that a lender is not going to loan more than the house is worth. Therefore, its obvious that she cannot refinance.

She should however talk to her ex. If the judge orders the house sold, any short sale is going to have a negative impact on his credit. Quite frankly, in my opinon that would be worse than having his credit tied up for another couple of years until she builds more equity and the market has time to recover.

Wrong. It is NOT obvious that she cannot refinance. She also has to show that she cannot come up with the funds necessary in order to contribute to the refinancing. She may very well lose this battle. And she could be ordered to come up with any money necessary to PREVENT a short sale. But she does NOT have a right to tie up his credit.

 

[Ohiogal]

I would agree with you if there was enough equity in the home to allow a refinance to happen....for example if her credit was a little shaky and she had to work extra hard to get a lender to give her a chance.

However, this is one of those cases where if there isn't enough equity, there isn't enough equity. She could go to 12 lenders and the answer would be the same.

There also isn't a time limit in the court orders.

If it were me, I would go into court with a current appraisal of the home, and a statement showing the balance due on the mortgage, and let the judge see that that is why she cannot refinance at this time.

Its also quite possible that her ex does not realize that a judge cannot order a lender to give her a loan, and also doesn't understand what a short sale will do to his credit....therefore it would behoove her to explain that to him.

She also better be able to prove that she can not get cash in any manner in order to aid her refinance. And she better not have bought a new vehicle or other luxuries (vacation for instance) in the time that she states she cannot refinance.

Oh I will save you the trouble -- OP contact an attorney in your area to talk to because LD was disagreed with.