Q: I was divorced in 2000 and counseled at that time to sign a quit claim deed. My ex-spouse was assigned the mortgage payments but ended up increasing the amount owed on the mortgage from $62,000 to $98,000. I am still listed on the loan, 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 title 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 lender fronted payments for real estate 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 amortization 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would be that the loan you and your ex-spouse had was a home equity line of credit that allowed additional funds to be withdrawn and the loan balance would have increased by those additional withdrawals.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 attorney, who can look over your documents and see if there is any way to get you out from under in this situation. Good luck.