House Refi after divorce

[nextwife]

Why was this issue not addressed in the divorce, or was it and you only want to segment this portion of the issue?

Unless one is "in the business" it is likely they did not know what LTV ratios would be required to refinance in the current loan environment, nor would a layperson know what the current market comps might be. 100% loans and higher used to be available- but underwriting keeps changing. Additionally, if the party refinancing now has alimony or support obligations, their income available to qualify may have changed without them realizing it.

 

[Ohiogal]

NO WHERE DID I SUGGEST THAT IT SHOULD BE A SHORT SALE. No where. Try rereading what i stated. I said the court could order it be placed on the market at market value or a price that would sell quickly -- not that they could force a short sale. In other words, they would not allow him to put it on the market for an unreasonable price just so he could say it was up for sale but no one is looking. He needs to be able to cover the short fall. End of story. He needs to refinance. End of story. Which means he comes up with cash one way or another or he finds himself in contempt.

 

[thecapt]

@LDiJ, you are exactly right that my Ex thinks the court can make me do something I can't. The decree said to refi in a year. We had a 80-10 loan. I refied the 1st without an issue. The bank won't touch the 2nd because of negative equity. I alway have paid this on time and don't want to give up the house. I sent an email this morning laying out the options of either giving me 18-20 months to pay this off or her going to court and having a judge force a sale which would still leave a balance and both names on the 2nd loan because of 2nd position and I would let the loan default. I wish I had the extra cash to pay it off now but don't. thanks for all your help guys.

 

[tranquility]

@LDiJ, you are exactly right that my Ex thinks the court can make me do something I can't. The decree said to refi in a year. We had a 80-10 loan. I refied the 1st without an issue. The bank won't touch the 2nd because of negative equity. I alway have paid this on time and don't want to give up the house. I sent an email this morning laying out the options of either giving me 18-20 months to pay this off or her going to court and having a judge force a sale which would still leave a balance and both names on the 2nd loan because of 2nd position and I would let the loan default. I wish I had the extra cash to pay it off now but don't. thanks for all your help guys.

The judge can do many things to resolve your contempt of court orders. Perhaps you will start owing your ex rent at market rates. Perhaps he will find some way to differently divide the assets than previously found. Perhaps any number of things. The key point is that you must move to be relieved from the order before you violate it. If you don't, the court will not be happy. Does that mean the deal will be worse if you force the ex to file? Not necessarily, but judges are people too. Your call.

One more thought:
Maybe you can transfer the house to some jointly-owned entity where you both have to pay the mortgage and then rent it out.

 

[Bali Hai]

The judge can do many things to resolve your contempt of court orders. Perhaps you will start owing your ex rent at market rates. Perhaps he will find some way to differently divide the assets than previously found. Perhaps any number of things. The key point is that you must move to be relieved from the order before you violate it. If you don't, the court will not be happy. Does that mean the deal will be worse if you force the ex to file? Not necessarily, but judges are people too. Your call.

One more thought:
Maybe you can transfer the house to some jointly-owned entity where you both have to pay the mortgage and then rent it out.

I wouldn't become optimistic. It's probably going to be the same judge who made the original order knowing that it was impossible to comply with.

 

[thecapt]

Is getting the decree amended something I can do myself or have to hire an attorney again? What about my ex, will she have to get an attorney also? Would I have to pay forhers since i can't comply?

 

[tranquility]

A solution is needed. You staying in the property until conditions change is not a solution.

 

[wavehopper27]

Given the choice of either maintaining the status quo until a solution on the second mortgage can be found or selling the house and both parties sharing the cost of the deficit, I'll bet the ex votes for the status quo.

 

[LdiJ]

Is getting the decree amended something I can do myself or have to hire an attorney again? What about my ex, will she have to get an attorney also? Would I have to pay forhers since i can't comply?

If you sit down and talk to each other about it, in person, and come to an agreement as to what is in both of your best interests then no, neither of you would have to get an attorney because you would be filing a stipulated agreement with court.

 

[tuffbrk]

Just a note that the courts can force you to comply with the existing agreement...especially if you have a 401k or any other assets that they can force you to liquidate to make her whole. Thus,if your ex is not receptive (and BTW - you're divorced. She can choose to not be reasonable if she so desires) I would strongly recommend that you get to the courthouse and file a motion. Then you can lay out the options provided as an alternative to the existing requirement. The judge may perceive that you are reasonable and attempting to do the right thing and grant it. Then again, they may force you to liquidate. I would recommend that if the ex received any consideration related to pension, alimony, etc. as a result of the debt being assigned to you (I'm assuming here that you assumed the debt) that you mention this in your motion as well.

As to whether you would be required to pay for your ex's attorney - anything is possible. However, if you're in fairly similar circumstances it's entirely possible that you would both be responsible for your own fees. A local attorney can provide you with more guidance on that topic.

 

[thecapt]

thank you everyone. You all have been a big help.

 

[LdiJ]

Just a note that the courts can force you to comply with the existing agreement...especially if you have a 401k or any other assets that they can force you to liquidate to make her whole. Thus,if your ex is not receptive (and BTW - you're divorced. She can choose to not be reasonable if she so desires) I would strongly recommend that you get to the courthouse and file a motion. Then you can lay out the options provided as an alternative to the existing requirement. The judge may perceive that you are reasonable and attempting to do the right thing and grant it. Then again, they may force you to liquidate. I would recommend that if the ex received any consideration related to pension, alimony, etc. as a result of the debt being assigned to you (I'm assuming here that you assumed the debt) that you mention this in your motion as well.

As to whether you would be required to pay for your ex's attorney - anything is possible. However, if you're in fairly similar circumstances it's entirely possible that you would both be responsible for your own fees. A local attorney can provide you with more guidance on that topic.

Just an FYI, while its a commonly held belief that a judge can force someone to liquidate a 401k or IRA, its not actually true that a judge can do so. Someone can be forced to divide an IRA or 401k via the QDRO process in a divorce, but not to actually liquidate or be forced to remove any money from the retirement vehicle.

 

[Ohiogal]

Just an FYI, while its a commonly held belief that a judge can force someone to liquidate a 401k or IRA, its not actually true that a judge can do so. Someone can be forced to divide an IRA or 401k via the QDRO process in a divorce, but not to actually liquidate or be forced to remove any money from the retirement vehicle.

A judge can consider all of the assets OP has and determine that it is possible for him to refinance the house due to the assets at his disposal -- including the 401k -- and order him to take what steps are necessary from his assets in order to refinance.

 

[thecapt]

just to be clear, if the house is underwater and a sale would still leave a balance, the judge can't force a sale? If I can show that the bank won't refi it and I don't have the assets to pay off immediately what do you guys think would be the out come? I'm trying to talk to my ex and not getting anywhere. i feel that going to my attorney and having him do what he needs to do to get me more time is the best bet. thoughts?

 

[Ohiogal]

just to be clear, if the house is underwater and a sale would still leave a balance, the judge can't force a sale? If I can show that the bank won't refi it and I don't have the assets to pay off immediately what do you guys think would be the out come? I'm trying to talk to my ex and not getting anywhere. i feel that going to my attorney and having him do what he needs to do to get me more time is the best bet. thoughts?

Did you "win" this house in the divorce or settle and get this house? If so, why didn't you suggest at that time that it be sold and you two split the deficit rather than you wanting to keep the house AND still expect to tie up her credit?