Mortgage payments while getting divorced (NY)

[Mrowka]

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

My friend will be getting a divorce (she discovered her husband of 18 years has been cheating on her). She says she consulted an attorney and he told her that she should move out of their house (jointly owned and mortgaged) before filing for a divorce because then she can stop contributing to mortgage payments (they're planning on selling the house). Is this correct?

 

[Zigner]

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

My friend will be getting a divorce (she discovered her husband of 18 years has been cheating on her). She says she consulted an attorney and he told her that she should move out of their house (jointly owned and mortgaged) before filing for a divorce because then she can stop contributing to mortgage payments (they're planning on selling the house). Is this correct?

She is still responsible to the mortgage company for the payments. Her contractual obligations to the mortgage company do not change based on her marital situation.

 

[LdiJ]

She is still responsible to the mortgage company for the payments. Her contractual obligations to the mortgage company do not change based on her marital situation.

I agree she will still be responsible to the mortgage company. However it is the norm that the party that has use of the house is the party that is responsible to pay the mortgage, within the divorce/separation.

 

[nextwife]

I agree she will still be responsible to the mortgage company. However it is the norm that the party that has use of the house is the party that is responsible to pay the mortgage, within the divorce/separation.

You need to stop asserting this. It was the norm back in the day when people had reasonable equity and one or the other could AFFORD coverage of the mortgage on their own. And back when the one left behind had a reasonable expectation of listing and selling quickly if they could not afford to keep up the payments alone. That day is OVER!

In many cases, keeping the mortgage current requires financial contributions from both borrowers, and the loan was granted based upon both borrowers agreeing to repay. Removing oneself from the property first does not diminish their obligation to make certain those payments continue to be covered.

This sort of "easy financial fix" attitude ("I moved so I shouldn't need to pay") is another reason why our RE market has tanked, and foreclosures are up. Many mortgages granted require the contribution of both borrowers, and the lenders are often the ones burned when attorneys and "advisors" lead people to think they can get out of contractual responsibility by up and moving.

 

[mistoffolees]

You need to stop asserting this. It was the norm back in the day when people had reasonable equity and one or the other could AFFORD coverage of the mortgage on their own. And back when the one left behind had a reasonable expectation of listing and selling quickly if they could not afford to keep up the payments alone. That day is OVER!

In many cases, keeping the mortgage current requires financial contributions from both borrowers, and the loan was granted based upon both borrowers agreeing to repay. Removing oneself from the property first does not diminish their obligation to make certain those payments continue to be covered.

This sort of "easy financial fix" attitude ("I moved so I shouldn't need to pay") is another reason why our RE market has tanked, and foreclosures are up. Many mortgages granted require the contribution of both borrowers, and the lenders are often the ones burned when attorneys and "advisors" lead people to think they can get out of contractual responsibility by up and moving.

Furthermore, moving out before filing doesn't change anything - even if you ignore the banking obligation matter. Whether the parties still live in the house or not, they can request a temporary order for possession and maintenance of the marital home. Moving out before filing really doesn't gain very much in most cases.

HOWEVER, since it's a local attorney who suggested it, it may be local practice for the person who remains in the home to normally get the responsibility for making the payments - at least as far as family court is concerned (obviously, not wrt the bank). I'd hesitate recommending against a local attorney's advice. I would, however, ask him to clarify somewhat.

 

[Mrowka]

I agree she will still be responsible to the mortgage company. However it is the norm that the party that has use of the house is the party that is responsible to pay the mortgage, within the divorce/separation.

i guess this was the basis for the advise she got. Thanks.

 

[tuffbrk]

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

My friend will be getting a divorce (she discovered her husband of 18 years has been cheating on her). She says she consulted an attorney and he told her that she should move out of their house (jointly owned and mortgaged) before filing for a divorce because then she can stop contributing to mortgage payments (they're planning on selling the house). Is this correct?

A) Your friend should be posting
B) Your friend should put the house on the market ASAP
C) Your friend should understand that leaving hubby in the lurch for the mortgage payment will not protect her equity in the asset. Also, she most likely will have to repay her half of the mortgage payment for how many number of months the house is on the market prior to sale.
D) Your friend will most likely lose the deduction for the mortgage interest even though she will have to repay her half of the payment as part of her financial settlement.
E) Your friend has no guarantee that cheating spouse will maintain the house in a manner that will assist in a quick sale.

I really dislike games, payback, and nonsense. Your friend will find the courts dislike it too.

 

[LdiJ]

You need to stop asserting this. It was the norm back in the day when people had reasonable equity and one or the other could AFFORD coverage of the mortgage on their own. And back when the one left behind had a reasonable expectation of listing and selling quickly if they could not afford to keep up the payments alone. That day is OVER!

In many cases, keeping the mortgage current requires financial contributions from both borrowers, and the loan was granted based upon both borrowers agreeing to repay. Removing oneself from the property first does not diminish their obligation to make certain those payments continue to be covered.

This sort of "easy financial fix" attitude ("I moved so I shouldn't need to pay") is another reason why our RE market has tanked, and foreclosures are up. Many mortgages granted require the contribution of both borrowers, and the lenders are often the ones burned when attorneys and "advisors" lead people to think they can get out of contractual responsibility by up and moving.

Nextie...despite the changes in the housing market, its still pretty rare for someone to be ordered to help cover the mortgage if they are not living in the home.

 

[LdiJ]

A) Your friend should be posting
B) Your friend should put the house on the market ASAP
C) Your friend should understand that leaving hubby in the lurch for the mortgage payment will not protect her equity in the asset.

I agree with this advice.

Also, she most likely will have to repay her half of the mortgage payment for how many number of months the house is on the market prior to sale.

Not at all a given...as I just pointed out to Nextie

D) Your friend will most likely lose the deduction for the mortgage interest even though she will have to repay her half of the payment as part of her financial settlement.

Completely wrong. You may deduct mortgage interest and property tax that you are 1) legally obligated to pay and 2) have actually paid. If she pays any of it at all, she is legally allowed to deduct what she has actually paid, and the other party can only deduct what they have actually paid.

E) Your friend has no guarantee that cheating spouse will maintain the house in a manner that will assist in a quick sale.

I agree with this

I really dislike games, payback, and nonsense. Your friend will find the courts dislike it too.

Moving out of the marital home and establishing another home (and the requisite expenses) is not necessarily game playing. Some times its just plain necessary.

 

[nextwife]

Furthermore, moving out before filing doesn't change anything - even if you ignore the banking obligation matter. Whether the parties still live in the house or not, they can request a temporary order for possession and maintenance of the marital home. Moving out before filing really doesn't gain very much in most cases.

HOWEVER, since it's a local attorney who suggested it, it may be local practice for the person who remains in the home to normally get the responsibility for making the payments - at least as far as family court is concerned (obviously, not wrt the bank). I'd hesitate recommending against a local attorney's advice. I would, however, ask him to clarify somewhat.

I get phone calls from local borrowers all the time which include the phrase ". . . but my attorney told me . . ." followed by something we then had to explain was not binding on us. How many people are lead to believe that quit claiming the house to their ex removes them from responsibility for the loan because the divorce decree includes some agreement BETWEEN them about who is agreeing to pay? That's all irrelevent contractually, in the event of a default or death or BK of the retaining party.

I even get phone calls about a "court order to do a short sale" which we have not agreed to do as the lender, yet the attorneys have NO provision to cover the shortfall (not all banks are covered by the Obama plan). They create these orders blissfully ignoring what they are expecting third parties to be held to.

 

[Mrowka]

A) Your friend should be posting
B) Your friend should put the house on the market ASAP
C) Your friend should understand that leaving hubby in the lurch for the mortgage payment will not protect her equity in the asset. Also, she most likely will have to repay her half of the mortgage payment for how many number of months the house is on the market prior to sale.
D) Your friend will most likely lose the deduction for the mortgage interest even though she will have to repay her half of the payment as part of her financial settlement.
E) Your friend has no guarantee that cheating spouse will maintain the house in a manner that will assist in a quick sale.

I really dislike games, payback, and nonsense. Your friend will find the courts dislike it too.

A) of course, but she asked me what I thnik of the advice she got. It didn't seem right to me so I asked here.
B) the house was listed today
C) I will let her know
D) same here
E) most likely he will. It was his idea to sell it (before the divorce decision was made)

I do dislike your implications that she's trying to play games just based on 2 sentences I wrote. She realized the divorce is inevitable, went to an attorney to get some advice on what to do and what her rights are and this was part of what was suggested to her. She wants to move out asap, I guess because she feels she can't stay in the same house as her husband now.

 

[nextwife]

A) of course, but she asked me what I thnik of the advice she got. It didn't seem right to me so I asked here.
B) the house was listed today
C) I will let her know
D) same here
E) most likely he will. It was his idea to sell it (before the divorce decision was made)

I do dislike your implications that she's trying to play games just based on 2 sentences I wrote. She realized the divorce is inevitable, went to an attorney to get some advice on what to do and what her rights are and this was part of what was suggested to her. She wants to move out asap, I guess because she feels she can't stay in the same house as her husband now.

Well a big question is whether the two of them can continue to cover all of their pre-existing obligations to their combined creditors if they CHOOSE (yes, it is a choice) to add the increased cost of having two seperate households before they dispose of the house responsibility? Many borrowers cannot.

 

[Mrowka]

Of course, the added cost of the second residence has to be considered but I don't think she had thought of that. I am just trying to be a voice of reason for her now since it seems that the only thing she can think of now is to get as far away from him as possible. Very sad.

 

[tuffbrk]

Completely wrong. You may deduct mortgage interest and property tax that you are 1) legally obligated to pay and 2) have actually paid. If she pays any of it at all, she is legally allowed to deduct what she has actually paid, and the other party can only deduct what they have actually paid.

That's very true, however OP stated that the person is moving out so that they did not have to contribute to the mortgage payment.

I paid monthly, claimed the interest in my return and then was to be reimbursed (at the time of sale of the home) for ex's half of the payments that I paid from the date of divorce to the time of sale. A friend had the same clause in her divorce and lost out on claiming interest. The party that remains behind is responsible for maintenance and repairs until such time as the house is sold - so it's a bit of a trade off.

A person that vacates the premises to avoid their financial obligations translates into game playing in my eyes.

 

[nextwife]

Of course, the added cost of the second residence has to be considered but I don't think she had thought of that. I am just trying to be a voice of reason for her now since it seems that the only thing she can think of now is to get as far away from him as possible. Very sad.

And I'll betcha those advising her did no number crunching before making fiscally irresponsible recommendations. Emotions are fine and dandy, but should not drive what are FINANCIAL decisions. One should first evaluate what is or is not workable and is and is not financially sustainable.

The big problem is that many young couples can barely manage their bills on BOTH incomes, yet think that all will magically be handled once they create the added financial burden of an extra household.