Q: I was divorced in 2000 and counseled at that time to sign a quit claim deedA Quit Claim Deed is a deed that operates to release any interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds. in a property that a person may have, without a representation that he or she actually has a right in that property. For example, Sally may use a quit claim deed to grant Bill her interest in the White House, in Washington, DC, although she may not actually own, or have any rights to, that particular house.. My ex-spouse was assigned the mortgageA Mortgage is a document granting a lien on a home in exchange for financing granted by a lender. The mortgage is the means by which the lender secures the loan and has the ability to foreclose on the home. payments but ended up increasing the amount owed on the mortgage from $62,000 to $98,000. I am still listed on the loanA Loan is an amount of money that is lent to a borrower, who agrees to repay it plus interest., and my ex-spouse isn’t making payments.
I’ve been advised I am powerless to resist the forced sale, which is scheduled to occur next month. Here’s what I don’t understand: How could my ex-spouse have inflated the mortgage by $36,000 without my knowledge or consent? And, what are my rights in this situation? Thank you.
A: I have to say, you were given perfectly awful counsel at the time of your divorce. You have no rights to the house and yet your name was left on the mortgage.
What you should have done was leave your name on the titleTitle refers to the ownershipOwnership is the absolute right to use, enjoy, and dispose of property. You own it! of a particular piece of property. to the property and offered to provide your ex-spouse with a quit claim deed if, and only if, he refinanced the mortgage into his own name. Or you should have insisted at that time that your ex-spouse refinance the property and remove your name from the loan at the time of your divorce. Then you could have transferred your interest in the home to your ex-spouse and been finished with him and the situation forever.
As to your question about how a loan could have been inflated by 50 percent, here are some possible scenarios:
First, if your ex-spouse stopped making payments on the home some time ago and the lenderA Lender is a person, company, corporation, or entity that lends money for the purchase of real estate. fronted payments for real estateReal Estate is land and anything permanently attached to it, such as buildings and improvements. taxes and insurance on the home, those payments along with all of the late fees would be tacked onto the loan balance and could have substantially inflated the amount owed.
Some loans given to borrowers over the past decade were negative amortizationAmortization is a payment plan which enables the borrower to repay his debt gradually through monthly payments of principalPrincipal is the amount of money you borrow if you're getting a home loan. If you're buying a bond, the principal is the amount you're lending. Typically, you'll buy bonds with a face value of ,000. If you buy a ,000 bond, your principal is ,000. and interest. Amortization tables allow you to see exactly how much you would pay each month in interest and how much you repay in principal, depending on the amount of money borrowed at a specific interest rate.Negative Amortization is a condition created when the monthly mortgage payment is less than the amount necessary to pay off the loan over the period of time set forth in the note. Because you're paying less than the amount necessary, the actual loan amount increases over time. That's how you end up with negative equityYour share of ownership in a company. Stockholders are often referred to as equity investors, because they invest in the equity of a company. . To pay off the loan, a lump-sum payment may have to be made. loans. These loans allowed borrowers to pay less than what was really owed on the loan and the loan balance increased over time. While a negative amortization loan would not account for the entire increase in the loan balance, the negative amortization along with late payment fees, taxes and insurance could have increased the loan amount by that much.
Another possibility would be that the loan you and your ex-spouse had was a home equity line of credit that allowed additional funds to be withdrawn and the loan balance would have increased by those additional withdrawals.
And still another possibility is that your ex-spouse forged your signature on newer mortgage documents in order to take cash out of the property or for some other purpose without your knowledge. If your ex-spouse took such actions and you can show that your signature was forged, you may have no liability under that newer loan.
What you need to do now is immediately consult with a very smart real estate attorneyA Real Estate Attorney is an attorney who specializes in the purchase and sale of real estate., who can look over your documents and see if there is any way to get you out from under in this situation. Good luck.