Q: My husband and I divorced last year. Now, our family home is in foreclosure. In the final divorce papers filed with Hall County, GA the property was to be sold, with my ex husband having financial responsibility for the house. Meanwhile, he has rented the house, so renters are currently living there. I have no idea if they’re paying any rent because my ex-husband will not communicate with me.
My name remains on the primary mortgage, home equity line of credit, and our joint bank accounts. I have not signed a quit claim deed. Of course, we owe more than the house is worth and sales are extremely slow in the neighborhood.
I have spoken with the mortgage company and foreclosure attorney. I have explained the situation and faxed each a copy of the divorce agreement.
So, while my ex husband is in contempt of court, what is my financial liability? Specifically what about my responsibility for a deficiency action by either the primary lender or the HELOC lender following the foreclosure?
Also, should I sign a quit claim deed? According to the loss mitigation team at my mortgage company, if I signed a quit claim deed the debt couldn’t be reported under my name. (This doesn’t seem like correct information to me). The missed payments have already affected my credit. I can only assume the foreclosure will essentially ruin my credit for several years.
I look forward to hearing your expert real estate advice.
A: As long as your name is on the mortgage, you are entirely responsible for the mortgage and payment. In fact, you’re responsible for the entire mortgage even if you own the home jointly with your ex-husband.
Signing a quit claim deed might put you in an even worse position, where you are obligated to repay the mortgage but do not own it or control it in any way. You are correct that the information from the loan mod people is probably wrong.
You need to see the advice of a real estate attorney who can guide you. If you don’t know an attorney, please contact your local bar association and ask for the head of the real estate committee. That person should be able to help or can provide you with a specific referral.
At this point, you’re at the mercy of your ex-husband, with very little leverage. It’s likely the bank will foreclose on the property, and you can expect your credit to be ruined for 7 to 10 years. It will be 3 to 5 years before you can purchase another property with a mortgage.
The divorce decree might shield you from some of the obligations under the laws of your state. Unless you can use the divorce decree to force the lenders to clean your credit history, they will continue to report the failures to pay the mortgage and any other credit issues that relate to that home to the credit reporting bureaus.
I wish I had better news for you. Please seek the counsel of an excellent attorney as soon as possible.
Good luck – let me know what happens.