Bad idea: Quitclaiming property while your name remains on mortgage Daily Breeze
Q: When I was married, my wife and I signed a loan to buy a home. We got divorced, but she was awarded the house in the divorce agreement and stayed in the property for a few years after our marriage was finished.
I had to sign a quitclaim deed, and in the divorce decree it was stated that she would refinance if possible. The house went into foreclosure, and was sold, and now the lender is coming after me for some of the money.
Am I still liable for this loan? It has been years since I lived in the property. If I am liable, what can I do to take care of this situation?
A: One mistake homeowners frequently make when getting divorced is signing a divorce decree that requires a spouse to refinance the property at some unspecified time in the future, even though it assigns the ownership of the property to that spouse.
When you signed the quitclaim deed, ownership of the property transferred to your wife. But your name remained on the loan documents. So, your wife got the house,
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in california, if i buy a home that appraises at $150k and one year later it appraises for $300...?
how can i get the most out of my equity to buy another house: refinance or second mortgage?
Refinancing will give you the best rate over a 2nd mortgage.
A second would be a higher payment and that higher payment will count against your dti for the next place as well.
Open Book Advisor™
While a HELOC usually offers a more competitive rate than a HEIL, I don't like what I seen HELOCs do to peoples credit scores. The FICO algorithm normally sees HELOCs as a revolving line of credit like a credit card and if you max out the HELOC, then it's like having a maxed out credit card on the credit report, and that has an adverse impact on ones credit scores. HELOCs are also variable so the payments can increase.
So, on this one, I have to say do a 1st mortgage at 80% and do a 15% or 20% second mortgage at a fixed rate.
Lewis
lstretch@mortgagestar.com
Is there a temporary relief loan program for California homeowners who have a tough time paying the mortgage?
I heard about the new loan programs that allow home owners to refinance their mortgage to a lower interest, but those who qualify need a decent credit, certain income, and their homes need more equity than what they borrow. But what about those who are really suffering and have none of those above?
Unfortunately then you will join the ranks of those that have or are losing their homes. No credit, no income and no equity means pay for what you signed for. Sorry but not my fault you overextended yourself, buying way more than you could afford. Do not think my tax dollars should bail you out because of your foolish dreams, and not living in reality.
Does he still get 50% of the equity in our home?
We are unmarried with one child for 16 years, tenants in common, living in California (no common law exists here.) and we are breaking up.
I put the entire down payment and fees that went along with it.
I paid many thousands toward the principal
I paid for the additional downpayment (and the fees) when I refinanced.
I paid for the pool, backyard and for the kitchen to be remodeled.
He has paid 1/2 the mortgage for the 5 years we have lived here.
I have paid over $28000 in his creditcard debt.
Our home value has gained about $300000 in equity in the past 5-6 years.
Since we are unmarried, what is he entitled to financially?
I pay the mortgage from my own individual account along with all the other bills.
The answer will depend on exactly what your deed (title) and mortgage says. If it is in your name only, then it will be difficult for him to claim a 50% ownership. If the house is in both of your names, he is more likely to be entitled to 1/2.
You need to see an attorney to protect your rights and find out what his rights are.
Wouldn't this be much easier if you'd gotten married? You'd know what your rights and responsibilities are.
However, if you've paid bills bills on his behalf and you didn't benefit from the purchases made on those cards, then you probably have some legal negotiation room.
This will become a negotiation, either with--or without--lawyers. Try to work it out without lawyers first: they will just detract from the funds available to your both.
Sounds like half was his part of the rent payment to you. Why should he get half.....if he wanted half he should have married you. Be careful though, didn't some famous couple sue for palimony back in the 80's? I say he paid rent to you...that's all. If he wasn't with you he'd be paying rent somewhere else....right! Check with your lawyer to see what they think. Is his name on your deed? If so, he gets half, married or not.
You can Quitclaim him off but need him to sign off on it.
What happens if you foreclose on a property in California and have a HELOC on the property?
My sister has a first mortgage and a HELOC (home equity line of credit). Most of the heloc amount was used to pay for refinancing costs because she also had a prepayment penalty. She got the Mortgage in December 2004 and refinanced in January 2005. She got the Heloc when she refinanced. Will she have to pay the Heloc?
Thanks
Yes, most lenders will try and come after you for the balance of the HELOC even if it forecloses. What she should do is call the lender and try to negotiate a payment arrangement for the balance.
My mom is in a middle of a divorce and stuck with a huge mortgage, what should she do?
Mother is in middle of divorce, may be stuck with a huge mortgage + HELOC loan attached. The home has no equity left, since they've refinanced twice (big mistake) in the past plus sinking home prices. As far as dividing up the liabilities, what other options does she have? This is in the state of California (Santa Clara County). She is afraid that she may be stuck with the house and not able to catch up with the mortgage. She would like to avoid foreclosing if all possible. Thanks
If her husband is a co-borrower on all loans, your mom won't be stuck with any huge mortgage on her own. The only way for him to be released from any financial responsibility for all of those loans would be for your mom to refinance in her name only and pay off the existing loans. It doesn't sound like there's enough equity to do that. She probably can't agree to take the home even if she wanted to, since she would have to get her own loans to pay off the existing loans. I'm guessing the court will order the home to be liquidated and the proceeds used to pay off the loans. If there's a short fall to pay all loans, the court could order other assets be used to make up the difference.
Sounds like a bad situation. I don't know the laws of California and not giving any legal advice so make sure she has a good divorce lawyer.
Hope this helps. Good luck to her.
Elliot Lau, Realtor of 22 years
1) She could let the house on rent which will get her some regular monthly income. This will ease her mortgage payment burden.
or
2) Here is a link for The Catalog of Federal Domestic Assistance. See if there is any program in here that might be of any assistance to your mom.
http://12.46.245.173/pls/portal30/CATALOG.FUNCTIONAL_PROGRAM_TXT_RPT.SHOW?p_arg_names=func_cat_cd&p_arg_values=MM
Finally...
3) She could negotiate a short sale with the lender
Here is a blog that explains why a short sale is better than a foreclosure.
http://theshortsalecompany.blogspot.com/2007/11/short-sale-vs-foreclosure.html
All the best to you and your mom
That is something her attorney needs to work out.
That is what happens when people buy more of a house than they can afford..they generally cannot keep it in the event of a divorce or a death of a spouse.
If you bought someone out on a primary residence, is it a money purchase loan protected by California anti-def
anti-deficiency law meaning once the bank foreclosed the property; they are not allowed to come after me for the balance that didn’t satisfy the loan balance after the sale of the auction.
So I originally purchased the house in 2002 with my wife. Then she wanted to leave so I bought here out to transfer the title and mortgage to me. An additional 30k in home equity became part of the new mortgage and was paid to her. The sellers were listed as herself and me and the buyer was listed as me but with a different form of my name. Does this financing count as a money purchase loan that is protected against deficiency judgments in foreclosure or is it just a refinance that would have no protection in foreclosure?
I have paid off around 20k of the total mortgage. Does that mean they can only come after me for 10k now in foreclosure or can they come after me for the full mortgage amount of 260k?
Once you refinanced and took the 30k you exempted yourself from anti-deficiency. You are going to be liable for the entire amount of money you spent.
Adjustable rate coming up on my mortgage.80/20 loan?
I live in southern California, I currently have an 80/20 loan and the 80% is going to adjust. I'am in the process of refinancing but it isn't looking too good for me, I have about 20,000 in equity according to a recent home appraisal but I'am still having problems getting a loan. The payments will go up around $700.00 when it adjusts and it will be almost impossible to pay. Should I contact my Mortgage company now and see if they can work with me and if so what is the likely hood that they will work with me? I would like to avoid a short sell or obviously foreclosure. What are some of my other options? I have fair credit and good income. Beneficial is the company the loan is through.
Contact your mortgage company NOW and explained the stitition today and see if they can help you or refi your home.
You also think about refi into FHA loan if your loan amount is low.
Your best bet is to call the company that holds your note NOW and explain your situation. Banks do not want to own property, and it is in their best interest to work with you to find a rate you both can live with.
Also, interest rates are still very very low. Unless your initial rate for the ARM was one of those ridiculous 1% deals (which are now illegal) you should not have much trouble finding a good rate to refi at.
Good Luck!
If you have had mortgage lates then it will make it a lot harder!
Most lenders will not help you with the refinance as they are hoping that you will pay that higher rate when it adjusts.
If your current lender can't do them, call around.
My friend refinanced his house to buy a pool and 2 cars. Under McCain's proposal does he get to keep them?
When house prices were skyrocketing in California, a lot of my friends refinanced to take equity out of their homes. They used the equity to buy cars, vacations, pools, etc. Now that house prices have fallen, however, they have 2 or more mortgages and are "underwater".
Obviously, there is no way to take back a vacation or a pool, but under r McCain's proposal to buy their bad mortgages and reduce the balances - will they get to keep their Beemers and Mercedes?
They have to prove they can't pay. I would like to know why I don't get a break. I pay my mortgage every month. I don't even have cable. Why don't I get a break?
Joint tenancy & quit claim deed.?
Purchased a home in california, ex girlfriend moved out. Title is held in joint tenancy, we are listed on both the mortgage & title. All funds used to purchase were my seperate property, no payments from ex ever made. I do not want to file a partition & she wont sign a quit claim, what are my other options? Is she resposible for any payments? I don't want any money from her, I just want her off the title so I can refinance. She states she plans on taking half the equity down the road & will use the house as a "insurance policy" in the event she gets into financial trouble, I would like to prevent that from happening. Any Ideas?? And yes, I am fully aware this was a very stupid decision to buy a house with someone I was not married to.
Call an attorney, ASAP.
I'm not going to pour salt in your wound, but if she is planning on fighting you on this, you need an attorney.
Recourse Loan Or Non-Recourse Laon?
I am facing foreclosure on my home. I used 100% financing to purchase my home. It was strucutred as an 80/20, with the 2nd being a Home Equity Line Of Credit (HELOC). Now ,I know in California 1st mortgages are non-recourse. I am a bit confused and have gotten mixed feedback on the HELOC. Some say that all HELOCs are recourse loans. Others are telling me that only HELOCs where you have pulled against your equity are recourse, while a HELOC used as a 2nd mortgage to purchase a home is non-recourse. I HAVE NOT refinanced either of my loans and I have not used my HELOC to pull cash out. I simply used as a 2nd mortgage as recomended by my loan officer. Anyone have the answer?
Read your contract. It will tell you if the loan is recourse or non-recourse.
And it most definitely DOES make a difference if it is or not when it comes to the 1099-C and Cancellation of Debt income with the IRS. A non-recourse loan does NOT trigger a COD income event since once the loan is foreclosed upon there is no remaining debt for you to pay, even if the proceeds from the sale are not sufficient to cover the outstanding balance. If there is no remaining debt to pay, there is no COD and therefore no taxable event. PERIOD!
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