Q: My friend has a home he lives in and owns different house in another state that is about to be foreclosed on. The foreclosure happened because after his divorce, his name came off the deed to the property but not off the mortgage. His ex-spouse failed to make the payments. He owes about $290,000 but the property is worth only $200,000.
Can he lose the equity in his primary residence and any money he has in the bank in this foreclosure? How can we find an attorney who can guide us?
A: Your friend’s biggest problem is that he didn’t insist at the time of his divorce that his ex-spouse refinance the property to take his name off of the mortgage.
I don’t know if the foreclosed property is in a non-recourse state. If it is a non-recourse state, then the lender would foreclose on the property and would not be entitled to go after other assets. Otherwise, the lender would have to file for a deficiency judgment.
A deficiency judgment is given to a lender that is owed more than what the lender gets through the sale of the home in foreclosure. In some states, lenders can go after other assets once the home is foreclosed on and the lender is still owed money.
Your friend will need to hire an attorney to make sure that once the property is foreclosed on by the bank, the bank would not have the right to go after him for any other money owed to the bank. Your friend might also want to talk to the divorce attorney that helped him out and get more information. The divorce decree might have provided that the spouse would be solely responsible for the debt on the home. It might turn out that the divorce decree could shield him from any consequences from the foreclosure. But he should check that out with his attorney.
I don’t recommend individual attorneys. However, your friend should contact the local bar association and ask to speak to the head of the real estate committee. That person should be well-versed in real estate matters and can recommend a trusted real estate attorney who can assist with this problem.
I am wondering what to do. I left my x husband 2 years ago due to domestic violence. The kids and I did not wish to remain in the house. (even though my dad helped us build it). I had never had credit so my x took out the mortgage and the most recent refi. I asked at the divorce the home be put up for sale 10 days following the divorce and was awarded the first 10 grand (to pay my lawyer and such) and then we split any possible profit. Dilemma is that my x only had it on the market a short while and during that time I was asked ,hounded and then lectured by his agent to meet her (1 hr drive) and to sign papers so he could “take ” care of the sale. I simply would just get paid. I was and still am not very trusting of anyone that lacks to explain why I had to do so. I discovered I was not on the mortgage but an under signer. (also under my dads advice ) So now I am being taken to court for the foreclosure and my x claims I was the reason he couldn’t sell (or pay a dime since I left) What can I do? Can I contact the bank directly?