Tuesday, September 23, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

I’ve got an upside down mortgage and not-so-nice former spouse

By
From page C3 | September 22, 2012 |

Q:  My husband and I got divorced several years ago. The agreement was that both of us would stay on title to the house but I would make the house payments and live there. Of course,  like so many other people, we are now very upside-down on the value of the house. Also, I work for the county and with all the cutbacks my pay has gone down. Affording the house is becoming increasingly difficult.

I would like to short-sell the house. I called my ex-husband, now remarried, and told him what I would like to do. His response was that he wasn’t going to agree to anything, period. We have two loans on this house. The second mortgage was a line of credit we took out when we got divorced so I could give him cash in exchange for him agreeing to let me stay in the house and not sell it. At this point I don’t know what to do.

 A: Just based upon what little you’ve told me, I can tell you that a short sale makes the most financial sense for both of you.

There’s really only three ways to get out from under an upside-down mortgage.

You can take money out of your savings to pay the difference between what your home is now worth and what you owe.

If you’re willing to do that, you can simply sell the house.

Since few people are able or willing to write a big check to the bank, your only other choices are to short sell or allow the home to go into foreclosure.

Foreclosure carries some advantages, along with some big disadvantages.

In your case, you have a second mortgage that amounts to a huge problem.

Regular readers will recall that homeowners who meet certain qualifications and still have the original loan they used to purchase the property enjoy certain liability protections as a matter of law.

In other words, if you live in the home and have never refinanced, you likely have a loan commonly known as a purchase money loan. If so, a purchase money loan can’t sue you in the event you lose the property.

However, you mentioned that you took out the second mortgage in order to pay off your ex-husband.

Since you got that loan after you purchased the property, that loan is known as a recourse loan, meaning the bank can sue you for any money it loses after a foreclosure.

So, put another way, if your ex-hubby doesn’t cooperate in the sale of the house and you simply stop making payments, eventually the first mortgage will foreclose. Doing so will wipe out the second mortgage, and the financial institution will then sue you and your ex for whatever money it lost in the deal.

At that point, your only options will be to pay the judgment, file for bankruptcy or sit and watch as the bank goes after your salary, bank accounts and any assets you may own.

Under the new laws regarding short sales that went into effect last year, a short sale will avoid all of those problems.

However, a short sale would require your ex-husband to sign the closing papers, particularly the deed.

The hammer you have is if you’re willing to stop making payments and a foreclosure occurs, the bank will sue both of you and take their money from whomever it can.

Perhaps showing your ex-husband this column might help.

If, however, you can’t get your ex-spouse to think rationally about the problem and you’d rather not let it go into foreclosure and perhaps have to file for bankruptcy protection, there are some choices.

Depending upon exactly what your divorce’s settlement agreement says, your family law attorney may be able to go back into family law court and get a court ordering requiring your ex to participate in the sale.

If that’s not possible, the filing of a partition lawsuit will do the same thing, only the timeline will likely be much longer and the costs higher.

I wish I could give you an easy solution. But your ex-husband is simply taking the path of mutually assured destruction instead of thinking logically and in his best interest.

Hopefully, with time for a little reflection, he’ll come around.

Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you’d like to have answered in this column you can contact him at SolanoScene@TJones-Law.com.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

US / World

California wildfire crews brace for weather shift

By The Associated Press | From Page: | Gallery

 
LA County sheriff’s deputies testing body cameras

By The Associated Press | From Page:

 
Bear suspected to have killed New Jersey hiker

By The Associated Press | From Page:

Poll: Support for gay marriage may be leveling off

By The Associated Press | From Page:

 
Islamic State militants kill 40 Iraqi troops

By The Associated Press | From Page:

Sierra Leone, Liberia brace for new Ebola cases

By The Associated Press | From Page:

 
Islamist group kidnaps Frenchman in Algeria

By The Associated Press | From Page: , 3 Comments | Gallery

Pennsylvania governor confident ambush suspect will be caught

By The Associated Press | From Page: | Gallery

 
Focus on UVa employee in student’s disappearance

By The Associated Press | From Page: | Gallery

State police: 3 missing Afghan soldiers in custody

By The Associated Press | From Page:

 
Prosecutor: 800 rounds found in intruder case

By The Associated Press | From Page: | Gallery

Islamic State offensive poses problems for Turkey

By The Associated Press | From Page:

 
Study links changing winds to warming in Pacific

By The Associated Press | From Page: | Gallery

Crews work to clear debris from Shasta mudslide

By The Associated Press | From Page: | Gallery

 
.

Opinion

Editorial cartoon for Sept. 23, 2014

By Daily Republic Syndicated Content | From Page:

 
Still searching for the bottom in Iraq

By John M. Crisp | From Page: , 1 Comment

Academia needs to act to protect college women

By Dan K. Thomasson | From Page:

 
Question of the week: Will the drought end this year?

By Daily Republic | From Page: A8

.

Living

Today in History: Sept. 23, 2014

By The Associated Press | From Page:

 
Community Calendar: Sept. 23, 2014

By Susan Hiland | From Page:

 
Horoscopes: Sept. 23, 2014

By Holiday Mathis | From Page: B7

.

Entertainment

Kris Jenner files to divorce Bruce Jenner

By The Associated Press | From Page: | Gallery

 
Alaska TV reporter quits on air to promote pot

By The Associated Press | From Page:

Shonda Rhimes lays claim to Thursday nights on ABC

By Frazier Moore | From Page: | Gallery

 
Giuliani to help fight Noriega’s video game suit

By The Associated Press | From Page: | Gallery

‘The Lion King’ earns record box office

By The Associated Press | From Page:

 
Eric Lynch, Howard Stern’s diminutive foil, dies

By The Associated Press | From Page:

TVGrid Sept 23

By Daily Republic Syndicated Content | From Page: A11

 
.

Sports

Giants get closer, beat Dodgers 5-2 in 13 innings

By The Associated Press | From Page:

 
Prep boys water polo: Mustangs go 3-0 in Dixon tourney

By Daily Republic staff | From Page:

 
Prep boys soccer: Mustangs hold Indians to 0-0 draw

By Daily Republic staff | From Page:

 
MNF: Bears hold on to beat Jets 27-19

By The Associated Press | From Page:

Jeff Samardzija pitches A’s past Angels 8-4

By The Associated Press | From Page:

 
Nebraska’s Abdullah: Jameis Winston must grow up

By The Associated Press | From Page:

Raiders have to settle for moral victory

By The Associated Press | From Page:

 
Home of 49ers lineman Ray McDonald burglarized

By The Associated Press | From Page: , 1 Comment

Undisciplined play sends 49ers to 1-2 start

By The Associated Press | From Page:

 
Kicking game: It is called football, after all

By Barry Wilner | From Page:

US Soccer stands by Solo decision

By The Associated Press | From Page:

 
FIFA ethics judge hesitates on World Cup

By The Associated Press | From Page:

 
Braves fire GM Frank Wren after missing playoffs

By The Associated Press | From Page:

Royals beat Indians 2-0, gain on Tigers

By The Associated Press | From Page:

 
Bettman says NHL proactive about off-ice conduct

By The Associated Press | From Page:

Silver: NBA will review domestic violence policies

By The Associated Press | From Page:

 
Concern over McIlroy, McDowell more about results

By The Associated Press | From Page:

NFL vetting process: There are no sure things

By The Associated Press | From Page:

 
Owner: ‘No misinformation’ by Ravens on Rice

By The Associated Press | From Page:

This date in sports history for Tuesday, Sept. 23, 2014

By The Associated Press | From Page:

 
Kent creates scholarship for Cal women’s athletics

By The Associated Press | From Page:

 
.

Business

Treasury to unveil steps to curb tax inversions

By The Associated Press | From Page:

 
Tesco suspends execs over inflated profit report

By The Associated Press | From Page:

GM expert says 21 deaths eligible for compensation

By The Associated Press | From Page: | Gallery

 
Apple: 10 million iPhone 6 and 6 Plus sold

By The Associated Press | From Page:

US existing home sales fall in August

By The Associated Press | From Page:

 
Investors fret Yahoo’s future, stock dips

By The Associated Press | From Page: | Gallery

Businesses and investors pressing for green policy

By The Associated Press | From Page: | Gallery

 
.

Obituaries

.

Comics

Garfield Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Baldo Sept 23

By Daily Republic Syndicated Content | From Page: B6

Dilbert Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Baby Blues Sept 23

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote Sept 23

By Daily Republic Syndicated Content | From Page: B7

 
Beetle Bailey Sept 23

By Daily Republic Syndicated Content | From Page: B6

Zits Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Bridge Sept 23

By Daily Republic Syndicated Content | From Page: B7

Crossword Sept 23

By Daily Republic Syndicated Content | From Page: B7

 
Word Sleuth Sept 23

By Daily Republic Syndicated Content | From Page: B7

Frank and Ernest Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Pickles Sept 23

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Rose is Rose Sept 23

By Daily Republic Syndicated Content | From Page: B6

Sally Forth Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy Sept 23

By Daily Republic Syndicated Content | From Page: B6

Sudoku Sept 23

By Daily Republic Syndicated Content | From Page: B7

 
B.C. Sept 23

By Daily Republic Syndicated Content | From Page: B6

Wizard of Id Sept 23

By Daily Republic Syndicated Content | From Page: B6

 
Blondie Sept 23

By Daily Republic Syndicated Content | From Page: B6

Peanuts Sept 23

By Daily Republic Syndicated Content | From Page: B6