House Refi after divorce

[tranquility]

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?

I'm thinking you believe you can stay in the house and tie up the ex's credit without penalty because it is upside down. I think you're wrong.

 

[LdiJ]

I'm thinking you believe you can stay in the house and tie up the ex's credit without penalty because it is upside down. I think you're wrong.

He is not necessarily wrong...its more the fact that if the house is upside down there honestly is nothing he can do, at least for the short term, to do anything to help his ex's credit score, other than paying the house payments faithfully on time. Nor would their be anything his ex could do to help his credit score in the short term, if the house were awarded to her instead of him. Heck with housing prices they way they are right now, both of them would be better off out from under that house, and buying something suitable at a lower price. The problem is, how do they get out from under the house with a credit score suitable to purchase another?

They simply cannot. Now, to be fair to both of them there is one option. They can both stop living in the home, rent it out to someone else, and share both the expenses and the income. They would likely end up with somewhat of a loss, but maybe only a paper one. I personally would rather let my ex continue living in the home until it can be sold or refinanced without messing up my credit. But I wouldn't necessarily make that decision if no one explained to me how it worked...or if I couldn't financially trust my ex.

 

[tranquility]

He is not necessarily wrong...its more the fact that if the house is upside down there honestly is nothing he can do, at least for the short term, to do anything to help his ex's credit score, other than paying the house payments faithfully on time. Nor would their be anything his ex could do to help his credit score in the short term, if the house were awarded to her instead of him. Heck with housing prices they way they are right now, both of them would be better off out from under that house, and buying something suitable at a lower price. The problem is, how do they get out from under the house with a credit score suitable to purchase another?

They simply cannot. Now, to be fair to both of them there is one option. They can both stop living in the home, rent it out to someone else, and share both the expenses and the income. They would likely end up with somewhat of a loss, but maybe only a paper one. I personally would rather let my ex continue living in the home until it can be sold or refinanced without messing up my credit. But I wouldn't necessarily make that decision if no one explained to me how it worked...or if I couldn't financially trust my ex.

I said, "without penalty". Making the OP move out to rent it would be an option I mentioned earlier and I would consider it a "penalty" to the OP. Making the OP pay "rent" (It can't be rent, but some fee for the use of the property.) until it is refinanced is another option. The point is, the judge has many avenues to have the OP not gain an unfair advantage to the situation. A situation I believe will not turn around for many years. How many years should the ex have to wait?

 

[Bali Hai]

I said, "without penalty". Making the OP move out to rent it would be an option I mentioned earlier and I would consider it a "penalty" to the OP. Making the OP pay "rent" (It can't be rent, but some fee for the use of the property.) until it is refinanced is another option. The point is, the judge has many avenues to have the OP not gain an unfair advantage to the situation. A situation I believe will not turn around for many years. How many years should the ex have to wait?

As long as it takes for the economy to recover from the Bush/Cheny administration. If morons put Romney in the White house, at least 8 more years.

OP has no more control of the US economy than a judge does. The difference is that the judge thinks they can order anything and make it happen. This is called "the power went to their head".

 

[tranquility]

As long as it takes for the economy to recover from the Bush/Cheny administration. If morons put Romney in the White house, at least 8 more years.

OP has no more control of the US economy than a judge does. The difference is that the judge thinks they can order anything and make it happen. This is called "the power went to their head".

Specifically, the housing issue results from the Democratic party insistence banks give loans to people who were unqualified to receive them. This increased housing costs and created a "bubble" in the housing market. When the unqualified people could not afford the loans everyone knew they could not afford, the bubble burst--thus creating the mortgage crisis. The idiotic notion it was the prior administration that caused the problem shows the depth of thought of certain people's posts. True, the mortgage crisis was extended to the general economy though the concept of derivatives. This spread out the risk to many more people, thus making more money available for people to buy the houses (Cars, boats and whatever else people put on the housing credit card.) that grew the economy so drastically and allowed the government to overspend so prodigiously. (Not like now, however, which is more like prodigiously^2.) The people who made money from selling those derivatives were supported in both parties by the people selling the products that all this magic money could buy. (The Chinese did not loan us so much out of the goodness of their heart.) Even today, increased regulation has not done anything but decrease the pool of money from private industry and shifted the magic money creation to the Federal Reserve. It will be paid for by inflation. But, as before, when the people who get the money can't support it, the crash comes.

No, that's not the type of understanding that reaches people who make silly statements as above. Um...Obama, derp, derp.

 

[LdiJ]

I said, "without penalty". Making the OP move out to rent it would be an option I mentioned earlier and I would consider it a "penalty" to the OP. Making the OP pay "rent" (It can't be rent, but some fee for the use of the property.) until it is refinanced is another option. The point is, the judge has many avenues to have the OP not gain an unfair advantage to the situation. A situation I believe will not turn around for many years. How many years should the ex have to wait?

I am really kind of trying to play devil's advocate a bit here because I don't believe its such a benefit for many people to get to remain in the marital home...even if the reality of things means that they get to do it without refinancing for a while. In fact, in many cases I see those people as the victim rather than the reverse.

Many people feel stuck in a home that they cannot really afford...but in order to protect their own credit score (which in turn protects their exe's) they are dealing with it....then along comes the ex, who is remarried and wants to buy a home, but discovers that he/she cannot because of the prior mortgage...demanding that it refinanced and filing in court for contempt, with little to no understanding that what they want cannot happen.

What OP's ex wants is for the house, in all manifestions to be gone from her credit report with no negative reprecussions at all, and she wants it now. I can understand why she wants it. The problem is, nobody can give it to her. It cannot happen.

 

[nextwife]

Specifically, the housing issue results from the Democratic party insistence banks give loans to people who were unqualified to receive them. This increased housing costs and created a "bubble" in the housing market. When the unqualified people could not afford the loans everyone knew they could not afford, the bubble burst--thus creating the mortgage crisis. The idiotic notion it was the prior administration that caused the problem shows the depth of thought of certain people's posts. True, the mortgage crisis was extended to the general economy though the concept of derivatives. This spread out the risk to many more people, thus making more money available for people to buy the houses (Cars, boats and whatever else people put on the housing credit card.) that grew the economy so drastically and allowed the government to overspend so prodigiously. (Not like now, however, which is more like prodigiously^2.) The people who made money from selling those derivatives were supported in both parties by the people selling the products that all this magic money could buy. (The Chinese did not loan us so much out of the goodness of their heart.) Even today, increased regulation has not done anything but decrease the pool of money from private industry and shifted the magic money creation to the Federal Reserve. It will be paid for by inflation. But, as before, when the people who get the money can't support it, the crash comes.

No, that's not the type of understanding that reaches people who make silly statements as above. Um...Obama, derp, derp.

I was working in the housing industry for 30 years before it tanked, and, IMHO, the problems in housing are from two sources: the barely regulated mortgage BROKER portion of the lending community taking over the majority of originating. Parties doing loans who were in no way vested in the long term performance of these loans and who also were clueless about the markets in which they were making them. Local brick and mortar lenders, on the other hand, knew their markets and could look at an appraisal that was inflated and realize the value did not jive, then research it further. Once these wise guy mortgage brokers started dominating the market, looking only for point spreads and origination fees, then dump the loan, the market started to disintegrate. Mall storefront brokers, doing loans for anyone who could steam a mirror, looking at high risk loans as increased income, as a way to get a better point spread.

Then the economy started to collapse, DURING Bush Cheney, and people's incomes started to disappear, and the housing industry spiraled down even faster..

 

[tranquility]

I was working in the housing industry for 30 years before it tanked, and, IMHO, the problems in housing are from two sources: the barely regulated mortgage BANKER portion of the lending community taking over the majority of originating. Parties doing loans who were in no way vested in the long term performance of these loans and who also were clueless about the markets in which they were making them. Local brick and mortar lenders, on the other hand, knew their markets and could look at an appraisal that was inflated and realize the value did not jive, then research it further.Once these wise guy mortgage brokers started dominating the market, looking only for point spreads and origination fees, then dump the loan, the market started to disintegrate. Mall storefront brokers, doing loans for anyone who could steam a mirror, looking at high risk loans as increased income, as a way to get a better point spread.

I pretty much agree. However, without the banker reselling the loan, there would not have been enough velocity in the money supply to make all the loans. Small banks had to rely on their own assets to fund loans. A larger bank with access to fannie and freddy (and the derivative market) WERE regulated and were threatened to be removed from the markets if they didn't make the loans the politicians in Congress demanded. So, they could go and make a loan (and the immediate profit from) once and stay with it with a profit in the way we used to think banks should make money from interest spread OR they could resell the thing and make 10 loans with the same amount of reserve and make this quarter's profits and executive bonus that much greater. (The multiplier number I have no idea of. I use 10, but that is just for illustration.) The reason why this was acceptable to all was that it made more money available for loans and satisfied the political needs of those in power. There is no way so many could have afforded homes without the resale market for the loans. It leveraged risk by multiplying the number of times the same money could be used. Well, the same money and multiple promises to pay it back. The regulation issue is more related to the re-packager's misrepresentation of the quality of the loan package. I think intentional misrepresentation where the people should be in jail. The defense is that it was not on purpose. Right. But, they aren't in jail so...well so. Still, once a certain percentage couldn't pay it back ALL the leveraged amounts went down.

Then the economy started to collapse, DURING Bush Cheney, and people's incomes started to disappear, and the housing industry spiraled down even faster..

Cart, meet horse. The housing market was the leading indicator of the "collapse".

 

[nextwife]

I am really kind of trying to play devil's advocate a bit here because I don't believe its such a benefit for many people to get to remain in the marital home...even if the reality of things means that they get to do it without refinancing for a while. In fact, in many cases I see those people as the victim rather than the reverse.

Many people feel stuck in a home that they cannot really afford...but in order to protect their own credit score (which in turn protects their exe's) they are dealing with it....then along comes the ex, who is remarried and wants to buy a home, but discovers that he/she cannot because of the prior mortgage...demanding that it refinanced and filing in court for contempt, with little to no understanding that what they want cannot happen.

What OP's ex wants is for the house, in all manifestions to be gone from her credit report with no negative reprecussions at all, and she wants it now. I can understand why she wants it. The problem is, nobody can give it to her. It cannot happen.

IT is also very dangerous for the future US economy to be forcing people to raid their retirement funds to cover what would otherwise only be a paper loss (an underwater house is ONLY a loss if one dumps it or it's mortgage while the market is down). When people go into their retirement years without the retirement savings they need, WE, the taxpayers ultimately end up supporting them through either subsidized housing or nrsing home care they would have otherwise had the funds to cover. I see this constantly, where people no longer have retirement accounts and walk away from their homes (leaving their lender holding the bag) and either must move in with kids, or into subsidized housing in their later years.

I do NOT see a coborrowers wish to be instantly economically untangled to be important enough to be raiding peoples retirement, and maybe leaving us taxpayers helping cover their living costs down the road.

People want to be able to dump their spouse or coborrower with little to no financial consequence to themself and just "move on". THey need to realize when they get a mortgage with someone that their lender does not choose their coborrower - they do. And a mortgage is a potential 30 YEAR commitment.

 

[tuffbrk]

I agree that mortgage brokers did a lot to cause the mortgage industry issues. Having been employed by one of the big 3 (at that time) I can also state unequivocally that we chose to NOT participate in a number of the products available out there. Most specifically, interest only and reverse mortgage products.

That being said, it is what it is these days. I agree that it is always unwise to raid a retirement account unless you're actually retiring. However, it is becoming very common here in NJ for judges to order parties to liquidate all sources of funds that are available to them. That includes closing out 401k accounts, IRA's and pensions. They have no interest in your retirement - they are attempting to keep the welfare and food stamp rolls to a minimum at all costs. The economy has hit all households, however those households that have become 2 separate households have been hit especially hard. Paying parties continue to be held responsible to maintain the "marital lifestyle" regardless of layoffs, long term unemployment and disability issues.

As always, the Court climate differs based on the perspective of judges, local practice and your attorney. This OP in particular needs a free consult to learn what is currently happening in their local courts these days.

 

[nextwife]

The economy has hit all households, however those households that have become 2 separate households have been hit especially hard. Paying parties continue to be held responsible to maintain the "marital lifestyle"

The problem with the whole "marital lifestyle" thing is that, in a lot odf cases, it was the ever larger refis and second mortgages which were sustaining that lifestyle and not the incomes of the borrowers. I also handle bankruptcies, so I see the pages of creditors shown on the schedules for these couples. They NEVER had the income to sustain the marital lifestyle, and it was lived at the expense of their creditors.

And if it was not sustainable when they were together, it sure as all getout is not sustainable once one adds the cost of a second household.

 

[Bali Hai]

I was working in the housing industry for 30 years before it tanked, and, IMHO, the problems in housing are from two sources: the barely regulated mortgage BROKER portion of the lending community taking over the majority of originating. Parties doing loans who were in no way vested in the long term performance of these loans and who also were clueless about the markets in which they were making them. Local brick and mortar lenders, on the other hand, knew their markets and could look at an appraisal that was inflated and realize the value did not jive, then research it further. Once these wise guy mortgage brokers started dominating the market, looking only for point spreads and origination fees, then dump the loan, the market started to disintegrate. Mall storefront brokers, doing loans for anyone who could steam a mirror, looking at high risk loans as increased income, as a way to get a better point spread.

Then the economy started to collapse, DURING Bush Cheney, and people's incomes started to disappear, and the housing industry spiraled down even faster..

And now 4 years after these morons wrecked the economy and are out of office, will we believe big business Romneyrat and elect him? If so we deserve to lose everything the liar steals from us.

I lost 50% of my retirement portfolio under those jackasses (Bush/Cheney). I'm certain some of it went into Romney's overseas accounts that he never paid a dime of tax on.

He says HE will create 12 million jobs in the next four years? The experts say there will be 12 million jobs created in the next four years no matter who is elected.

MORE regulations are needed on these hawkers, not less! If they want to play blackjack with their own money, fine, just don't let them do it with my money.

nextwife is my hero!

 

[tuffbrk]

I am still an undecided voter. I typically vote my party line in those instances, however, my party representative is hand in hand with the Koch brothers who really need to have lived back in the Wild, wild West days when you could just take care of business. Today? All of those political contributions and lawyers keep those vile Koch brothers safe. I dislike and don't believe in either party running and yet women sacrificed so much to obtain the privilege to vote and so many soldiers since have fought and died defending the right to vote that I couldn't in good conscience sit this election out.

I might just write in a name. Bali for...LOL!

 

[tranquility]

And now 4 years after these morons wrecked the economy and are out of office, will we believe big business Romneyrat and elect him? If so we deserve to lose everything the liar steals from us.

I lost 50% of my retirement portfolio under those jackasses (Bush/Cheney). I'm certain some of it went into Romney's overseas accounts that he never paid a dime of tax on.

He says HE will create 12 million jobs in the next four years? The experts say there will be 12 million jobs created in the next four years no matter who is elected.

MORE regulations are needed on these hawkers, not less! If they want to play blackjack with their own money, fine, just don't let them do it with my money.

nextwife is my hero!

Obama...derp, derp, DERP!

The ignorance is astonishing.

 

[Bali Hai]

Obama...derp, derp, DERP!

The ignorance is astonishing.

Read and weep:

Dow Jones Five Worst One Year Performances (in points)

2008, -4488.43 points....Obama inherits Bush's pathetic economy.
2002, -1679.94 points....Bush goes to war with money that your great great grand kids will pay for.
2001, -766.42 points.....Bush ignores authorities that there was a major terrorist attack coming inside the US.
2000, -709.13 points....Bush implements economy crushing policies.
1974, -234.62 points....Tricky Dick caught lying and erasing White House tapes.

See the trend starting in year 2000? Five of the five worst years for the Dow Jones belong to Republicans. We can't let them wreak anymore havoc.

What is the common theme here? Republican! Trickle down! Reganomics!