Your Ex Was Awarded the House?

Your ex was awarded the house,* and she agreed to refinance the loan and buy you out of your share of the equity.** This has been verbally agreed to by you, her, and your attorneys, and approved by the judge, as well.

But wait! Has it been STIPULATED in your Order After Hearing?

If not, you’d better get it specifically stipulated in your Judgment…NOW!

What’s the big deal?

If you don’t make sure that your name is removed from HER mortgage, then it’s YOUR mortgage, too!

You’re no longer making the payments, so you don't have the ability to build equity or deduct the interest on your income tax returns, but you will STILL be financially liable for the loan, and will STILL have all of the same financial worries as before (has she been late on a payment…missed a payment…defaulted…paid her property taxes?), only now you won't have the benefit of homeownership because you no longer have a financial stake in the house!

And what happens if you want to buy another house?

- Best-case scenario: you’ll have to hassle with producing a court order to prove that you no longer have any financial liability for the existing loan even though your name is still on it (which may be an exercise in futility because the lender will likely recognize you as a co-borrower regardless. After all, you applied for the existing loan, you signed for the existing loan, and your name is STILL on the existing loan…so as far as the lien holder is concerned: it’s your loan).

- Worst-case scenario: Your loan application is rejected because your income-to-debt ratio is too high (your mortgage isn’t supposed to exceed 31% of your gross income), even though you don't have a financial stake in the house!

So if you don’t take care of this NOW before everything is finalized, you’ll have no chocie but to take care of it later…which will translate in to more $$$...LOTS and LOTS of $$$. Your attorney will most likely ask the judge for the court to hold jurisdiction over the house until your ex refinances it; he will also ask that it be specified exactly how long your ex has to refinance the loan, and what will happen if she doesn’t do it within the specified period of time (e.g., a forced sell if she can’t – or won’t – refinance, regardless of the reason).

The devil had 45 days to refinance the loan, which she (of course) didn’t meet. But because there was no stipulation concerning what would happen if she failed to meet the deadline, there wasn’t much my husband could do other than take her back to court and spend $$$ that he didn't have.

So be sure your court order is worded properly right from the get-go. It should stipulate (1) that she “shall be permitted an opportunity to buy out Respondent’s [or Petitioner’s, as the case may be] interest in the family residence,” (2) that she must refinance the existing loan, (3) that she must “remove Respondent’s name from any loan or mortgage within 45 days from this date,” and (4) specifically what will happen if she fails to refinance the loan for any reason within the stipulated period of time.

My husband’s Order After Hearing failed to stipulate that the devil had to refinance the loan; it only stipulated that she had 45 days in which to "remove his name from the loan." That’s not the same thing. We're just lucky that this didn't become an issue.

And, NO, a Quit Claim Deed won’t suffice! (http://en.wikipedia.org/wiki/Quitclaim_deed)

*Do NOT let her get away taking you back to court to increase your support obligation just because she can’t afford her mortgage payment: it’s not your fault if she "fails to make a reasonable effort to become self-supporting by undertaking a debt beyond her reasonable means to pay presently or in the foreseeable future." (1)

The devil acknowledged in court that she wouldn't qualify to refinance their marital house on her own because she was unemployed, and that she wouldn't be able to afford the mortgage payments once she became employed, so my husband was awarded the house and agreed to refinance it and pay the devil half of its equity. Two months later, they returned to court and the devil tried to pursuade the judge that she should be given an opportunity to buy the house; it swore that it and her mom would jointly refinance the house, and that its mom would move in and share expenses. This is the ONLY reason my husband agreed to allow the devil and its mom to buy him out of the house. So what happened? The devil refinanced the house on its own, and to this day relies on the entire amount of my husband's child support to make its mortgage payments. Needless to say, we're armed and ready for battle if the devil ever tries to take my husband back to court for increased child support based on its inability to pay its mortgage.

(1) In re the Marriage of JEANNE and ROBERT H. ANINGER, No. B038780, Court of Appeal of California, Second Appellate District, Division Seven, 220 Cal. App. 3d 230; May 11, 1990: “The only factor adversely affecting [Wife’s] ability to meet her needs was an increase … in her housing cost resulting from her purchase of a $280,000 condominium … it would defeat the intent and reasonable expectations of the parties that [Wife] would achieve self-support … by going into debt far beyond her means … By undertaking a debt beyond her reasonable means to pay presently or in the foreseeable future, [Wife] failed to make a reasonable effort to become self-supporting.”

**Do NOT let her stick you with paying any part of her closing costs! The BUYER traditionally pays the closing costs, and you are NOT the buyer…SHE is! The devil tried to force my husband to pay for half of its $6,966 closing costs (or $3,483)! We were dating by then, so he asked me to look over its proposed equity disbursement. If I hadn't looked at this, he would've (unwittingly) paid for its costs because sharing in the devil's closing costs had never been agreed to or even discussed! He protested through his attorney, and the fight was on! I don't know how the devil did it, but it managed to convince the Escrow Officer to set aside the ENTIRE amount of its closing costs (all $6,966!) from my husband’s equity disbursement, which its attorney then held in trust for TWO YEARS (!!!) before they went to trial and the judge deemed that it was rightfully his. He eventually received the money that remained (less what the devil’s attorney had helped herself to, to pay for things like, oh, the ENTIRE cost of their QDRO [vs. half], among other things)!