Q: I inherited my grandmother’s home 7 years ago. My husband, my daughter and I moved into the home and we owned it free and clear.
However, my husband has refinanced, second mortgaged and HELOCed us into financial ruin. The home recently appraised for $250,000, the mortgage balance is around $150,000 and the HELOC balance is about $25,000.
My marriage is quickly coming to an end due to my husband’s addiction to pain killers and I am putting my affairs in order. It occurred to me that I never put my husband’s name on the deed. How was it possible for him to obtain all these loans when the house is in my name only? Unfortunately, I do think he may have forged my name.
A: As it stands, the last sentence of your letter is probably the key to your situation. Were you aware that your husband had obtained financing on your home? Do you know what happened to the money from the loans?
You have about $175,000 in loans on a house worth $250,000. That means you have about $75,000 of equity in the home. Depending on your job situation, you now need to decide whether you should stay in the home or sell it. If you can afford the payments on the home, you can stay in it otherwise you might want to consider selling the home.
While the residential real estate market is weak, some real estate markets, and even some blocks in some towns are still doing well. You need to consider your options and may want to talk to a couple of real estate agents in your area to determine what property values are doing in your area and how long homes are taking to sell.
You should also go to open houses in your area to see how your home stacks up with other homes. Once you have a better feel for the real estate market in your area and how your home stacks up with others, you can decide whether to sell, at what price and have a better feeling for the amount of time it may take to sell the home.
While your husband may have forged your name on the loan documents, you may not be able to use that information against him if you knew he was refinancing the home at the time he obtained the loans, you never inquired further about the process, and ended up benefiting from the loans.
But if you didn’t know anything about the forgery, never knew until now about the loans, if your husband used all the money for his own purposes and neither you, nor the house, nor your kids benefited from the money, you might be able to file a police report against him and under certain circumstances unwind the loans.
While you say that your marriage is coming to an end, you should tread carefully. With any divorce, if that’s where you are headed, you need to know what you own, what you owe (even the debts that were obtained through devious means) and what your obligations will be in the future — your future expenses.
You should consult with an attorney in your area about your situation, both on the issue of your marriage and the forgery of the documents. Please get as much information and documentation together as possible in preparation for any meeting you have so the attorney can give you accurate advice and help you assess your options at this point.