Typical Refinancing Mortgage Question

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Latest post Tue, Jul 29 2014 5:55 AM by Drew. 30 replies.
  • Fri, Jul 25 2014 12:11 AM

    Typical Refinancing Mortgage Question

    I am a new member here, located in Florida,  and have searched through a lot of posts regarding mortgage refinancing after divorce. I didn't see anything that answered my questions so I'm obviously asking here.

    Roughly two and a half years ago the ex-wife and I divorced. She was awarded the marital home with a year to refinance. Understanding the market at the time and how underwater the home is, I didn't press too hard on the refinancing issue the first year. This past year and a half I have pressed harder typically sending a tri-monthly email asking the status of the refinance. As per typical in these situations, no response. So my problem is this:

    1.Liable for mortgage of $98,000

    2.Liable for home equity of $27,000. This comes due next year with a balloon payment.

    3.Unable to finance home (typical debt to income ratio)

    4. Unable to use my credit for any major purchases

    Lastly the ex is getting remarried and her and her spouse have a substantially large income so refinancing would logically not be an issue.

    What recourse do I have in this matter? My only concern is that these loans can default and it while it will hurt her credit, mine will be devestated.

    Thanks in advance for all of the replies.

  • Fri, Jul 25 2014 12:46 AM In reply to

    Re: Typical Refinancing Mortgage Question

    ...and I found my answers. I am thusly screwed and financially held hostage.

  • Fri, Jul 25 2014 1:12 AM In reply to

    Re: Typical Refinancing Mortgage Question

    jamesallen03:
    What recourse do I have in this matter? My only concern is that these loans can default and it while it will hurt her credit, mine will be devestated.

    You can try to go to court to seek enforcement of the divorce order, but the problem is she's not likely to get it refinanced if it's seriously underwater because the lender won't have have sufficient value in the property to be able to pay off the loan if it had to foreclose. The other option would be to force the sale of the home, but you'll end up taking a serious loss, and having to pay your share of the loan might be difficult. So, as your follow-up indicated, there's not an easy out for you on this.

  • Fri, Jul 25 2014 1:23 AM In reply to

    Re: Typical Refinancing Mortgage Question

    Thanks for the reply. It is a very bitter pill indeed. Looking at my options I can file contempt of divorce decree which will only do one of three thrings:

    1. Nothing. If she shows that she has tried to refinance then the courts will not hold her in contempt.

    2. Court forces a sale of the home. This means likely a short sale thus potentially making me liable for loss.

    3. Held in contempt and sent to jail which means the payments will not be made thus default and me being held liable (this is the least likely scenario)

    4. She could just decide to stop paying and thereby having a Pyrrhic victory

     

  • Fri, Jul 25 2014 6:01 AM In reply to

    • Drew
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    Re: Typical Refinancing Mortgage Question

    According to one of my friends who deals with FL residential RE , at least in her area the market is way up and quite tight, all,within say last year .

    I agree court is unlikley to do more that slap her with a wet noodle and give her more time .

    Im not saying  its easy to refinance ..but just about anything can be refinanced. Just not under terms that may would think are attractive.   M

    One critical. Detail is missing : just how many times did she actually try to get it refinanced, did you seek copies  of her refinance applications ?  Failure to try " might" make a judge view it as contempt.



  • Fri, Jul 25 2014 7:39 AM In reply to

    Re: Typical Refinancing Mortgage Question

    jamesallen03:
    1. Nothing. If she shows that she has tried to refinance then the courts will not hold her in contempt.

    That's the most likely scenario.

    jamesallen03:
    2. Court forces a sale of the home. This means likely a short sale thus potentially making me liable for loss

    One correction to that.

    For a short sale to go through, the lenders would have to approve the selling price and waive any balance above the selling price so you would not be liable for the loss.

    jamesallen03:
    3. Held in contempt and sent to jail

    Never happens.

    One thing you can do is seek possession of the home so that you can control the sale.

    jamesallen03:

    4. She could just decide to stop paying and thereby having a Pyrrhic victory

    That could happen.

    Nice to see that somebody else knows what a Pyrrhic victory is. :-)

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Fri, Jul 25 2014 7:43 AM In reply to

    Re: Typical Refinancing Mortgage Question

    Unfortunately the home is located in the panhandle which skews the home value to a certain degree. I will look into the valuation though as it may have increased.

    As for how many times she has made the attempt I am unsure. There is zero communication on her part. As I stated previously I send an email every three months asking about the status of the refinance. This is to every email address I have on file to which I am sure I am blocked.

    Would it be worth the effort and money to file contempt even though it might not go anywhere?

  • Fri, Jul 25 2014 8:08 AM In reply to

    Re: Typical Refinancing Mortgage Question

    jamesallen03:
    Would it be worth the effort and money to file contempt even though it might not go anywhere?

    That's gotta be your decision.

    Hauling her into court will put some pressure on her and cost you some money. Whether it accomplishes anything is anybody's guess.

    The court won't hold her in contempt for something she has no control over. If the house isn't worth what the mortgage balance is, it won't qualify for refinancing and the court will recognize that. In fact, the house would have to be worth more than the existing loan balance because lenders are typically looking for a new loan to be no higher than 80% of the appraised value of the home on a re-finance.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Fri, Jul 25 2014 8:29 AM In reply to

    Re: Typical Refinancing Mortgage Question

    I agree probably the only way to show seriousness instead of rattling off laconic emails ever few months that do not get read.

  • Fri, Jul 25 2014 9:25 AM In reply to

    • Drew
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    Re: Typical Refinancing Mortgage Question

    If she failed to make a serious attempt at refinancing,   the court might not be amused and might award you your court and attorney costs to pursue a violation of the order. .

    Id want copies of each application filed?

    Some folks I know,  know how to make paper applications designed to get turned down--so add a gain of salt if somethng does not add up....



  • Fri, Jul 25 2014 9:42 AM In reply to

    • Drew
      Consumer
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    • Joined on Thu, Mar 30 2000
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    Re: Typical Refinancing Mortgage Question

    A cloud on your credit may be difficult to articulate in terms of damages your suffered by her failure to get it done UNLESS you are papered as to being turned down and or scored lower in ways that have some actual impact on your borrowing costs



  • Fri, Jul 25 2014 10:04 AM In reply to

    Re: Typical Refinancing Mortgage Question

    adjuster jack:
    For a short sale to go through, the lenders would have to approve the selling price and waive any balance above the selling price so you would not be liable for the loss.

    Not correct. While it would be great if the lender would release the sellers from any obligation on the loan that is not paid in the sale (the deficiency amount), nothing requires a lender to do so. The buyer would want the mortage lien released, of course, but release of the mortgage lien does not discharge the borrowers’ liability on the note they signed agreeing to pay the loan. In some short sales, lenders are willing to discharge the deficiency, but that is not always the case.

  • Fri, Jul 25 2014 10:53 AM In reply to

    • Drew
      Consumer
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    • Joined on Thu, Mar 30 2000
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    Re: Typical Refinancing Mortgage Question

    Your post is a bit unclear...have you delivered title to her yet?



  • Fri, Jul 25 2014 10:58 AM In reply to

    Re: Typical Refinancing Mortgage Question

    Drew:

    Your post is a bit unclear...have you delivered title to her yet?

    Yes that was done about two weeks after the divorce hearing.

     

     

  • Fri, Jul 25 2014 11:04 AM In reply to

    Re: Typical Refinancing Mortgage Question

    Drew:

    If she failed to make a serious attempt at refinancing,   the court might not be amused and might award you your court and attorney costs to pursue a violation of the order. .

    Id want copies of each application filed?

    Some folks I know,  know how to make paper applications designed to get turned down--so add a gain of salt if somethng does not add up....

    The only way to know for sure is to obviously take her to court. Based on scuttlebutt and assumptions I am assuming that she and her soon to be husband are pulling close to $200K/year. That is of course assumption and non evidentiary. But if it is true then there might be something.

    My only document of being denied use of credit was about two years ago when I tried to trade in my vehicle. I was denied financing due to my debt to income ratio. which is roughly $130k on a $36k salary. Plus the denials hit my credit as well. I haven't persued a morgage yet based on the above information.

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