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Modify divorce decree to remove responsibility for mortgage

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Latest post Tue, Oct 21 2014 11:55 AM by Frank C. 12 replies.
  • Fri, Oct 10 2014 8:17 AM

    • Frank C
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    Modify divorce decree to remove responsibility for mortgage

    This is my first post on this forum. Any info is appreciated. Here's my situation:

    I was divorced 5 years ago. At the time we owned a home in MIchigan that had a huge mortgage and equity loan, putting the property well under water. Therefore during mediation we agreed that since we could barely afford the home on two incomes it was best to let the home go to foreclosure. Additionally as we reviewed our financial situation with the mediators, it was determined we both needed to file bankruptcy if we had any chance at surviving financially post divorce. It was also determined after the divorce I would file Chapter 7. Once my chapter 7 was done she would file Chapter 7.

    So when my exes attorney put in the divorce decree "The Defendant shall be obligated to pay the mortgage and home equity loan." it didn't realy matter. The house was getting foreclosed and we were filing bankruptcy anyway.

    Fast forward a year and my bankruptcy was final. The house was still in the process of foreclosure. Citibank contacted my ex and made her a mortgage modification agreement she couldn't refuse. I had already forfeited the home in the bankruptcy and was released from the debt. When the ex asked me to sign mortgage modification documents I said no way. Citibank agreed to modify the mortgage without my permissoin if I signed a quit claim. So I did. I assumed I was done with the home.

    Fast forward another 4 years and I'm trying to get a mortgage. My bankruptcy discharge is over 4 years old. I have no debt. I've use revolving credit responsibly since my bankruptcy and have a credit score around 700. I applied for a mortgage and got denied. The reason: my divorce decree states I am responsible for the mortgage and equity loan on my exes home. Even though I've quit claimned the house to her, and discharged the debt through bankruptcy, the mortgage company is saying I'm still responsible for the debt on my ex wife's home. I was asked to get the divorce decreee modified to say she is solely responsible for paying the mortgage and equity loan. I doubt she will have a problem with this, since the equity loan will be dischared when her bankruptcy is discharged (she had to go chapter 13 to get the equity loan discharged). Once that's out of the picture, she will have about $100,000 equity in the home. I'm guessing she doesn't want me to have any part of that.

    Everywhere I look I see ways to modify the divorce decree for child support, visitation, etc. But nowhere can I find information about modifying the marital home provisions. How do I do this?

  • Fri, Oct 10 2014 8:25 AM In reply to

    Re: Modify divorce decree to remove responsibility for mortgage

    Frank C:

    Everywhere I look I see ways to modify the divorce decree for child support, visitation, etc. But nowhere can I find information about modifying the marital home provisions. How do I do this?

    Simple.

    You hire an attorney to draw up the proper stipulation papers, get them signed by your wife, and have them filed with the court. Once the modification is entered into the court records you can provide a certified copy to the mortgage company.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Fri, Oct 10 2014 8:46 AM In reply to

    • Drew
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    Re: Modify divorce decree to remove responsibility for mortgage

    makes no sense to me that you pay to generate  a  docuement that you ex may refuse to sign anyway...you blew a point back when you issued a quit claim

    Details matter ...but if you were obligated as to existing note under the divorce order but the existing note was satisfied and a new note in her name only was created..by what stretch are you obligated to same ?

     



  • Fri, Oct 10 2014 8:56 AM In reply to

    Re: Modify divorce decree to remove responsibility for mortgage

    Frankly, I don't think you do.  What you ought to do is tell the lender you're dealing with that it is full of [fecal matter] and that, if its personnel don't pull their heads of their behinds, you'll take your business elsewhere.

    Beyond that, I agree with the prior response.

  • Fri, Oct 10 2014 8:57 AM In reply to

    Re: Modify divorce decree to remove responsibility for mortgage

    Drew:
    Details matter

    Not always.

    Sometimes it's the lender's perception that matters.

    If the lender says "do this" to qualify for the loan you "do this" or you don't qualify for the loan.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Fri, Oct 10 2014 9:27 AM In reply to

    • Drew
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    Re: Modify divorce decree to remove responsibility for mortgage

    I somewhat agree..if the lender or title firm finds a flyspeck they may just sit there until you find a way to remove flyspecks  and many a one time client lacks leverage .....even if he is 100% sure that flyspeck don't count. 

    Ask  that EX clean it up,..and remind her that if its not cleaned up that you may sue her for damages you suffer due to flyspeck or wart on your credit,she left in place due to poor drafting by her attorney ..may alter her view about cooperation?  Or may backfire..you know Ex..none here do.....



  • Fri, Oct 10 2014 9:39 AM In reply to

    • Kivi
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    Re: Modify divorce decree to remove responsibility for mortgage

    I agree with the response that you take your business elsewhere.

    In theory, I suppose your ex could take you back to court, because your BK only discharged your obligation to the lender, not to her. As noted, she is not likely to take you back to court because there is now equity in that house and she would not want to share it with you. Moreover, if she took you to court, you could easily cite the circumstances of the loan modification, your own bankruptcy, the fact that the debt was included in her bankruptcy (as the loan modification likely would have needed the BK court's "blessing"), etc.

    I am assuming that she reaffirmed the modified mortgage debt in her own bankruptcy and that she may still be making the mortgage payments pursuant to her chapter 13 repayment plan. But, if she has been in a chapter 13 repayment plan for close to four years (at this point), the likelihood that she is going to default  seems pretty remote. Most of these plans last from three to five years, but if they are going to go "kaput", they usually do so rather early on. It would make little sense for her to default at this point when she "has rounded third base and is half way to home plate" absent some major financial crisis of her own. In chapter 13 plans you don't get that discharge until you complete the plan but the "prize", discharge of the second mortgage/HELOC certainly has to look very reachable to her at this point.

     

  • Fri, Oct 10 2014 10:32 AM In reply to

    • Frank C
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    Re: Modify divorce decree to remove responsibility for mortg...

    adjuster jack, I'm somewhat of a cheap ass, and I was frankly hoping to avoid hiring an attorney if this turned out to be something simple. I have a lot more time than money.

    Drew, the problem is that it's not a new note. It's a loan modification of the existing mortgage...with my name still listed as primary. The bankruptcy has discharged the debt, and my credit reports show a zero balance. But the lein still has my name on it. I was simply told to sign the quit claim and she can modify the loan without me. I checked online and found that lenders do this all the time. I wasn't aware I would still be on the mortgage. This was never explained. It doesn't sound like something they can do legally, but apparently they can.

    And as far as taking my business elsewhere, that's the plan. But I spoke to several lenders since then and none of them seemed too eager to take my business. I spent $500 on appraisal and credit reports. I literally spent 24 hours over the course of a few weeks going online and visting courthouses to gather, scan and email documents to the lender, only to get the same response every time that they need another document. Their last requirements were to get the divorce decree modified and get Citibank to send letters indicating that they were not going to pursue me for payment on the loans. Yeah...they want Citibank to take the time to send letters to them letting them know that they will not pursue me for payment of loans I had discharged in bankruptcy. Seriously.

    So it's apparent this lender sucks, but before I go somewhere else I want to have as much in order as possible to avoid as much crap as possible.  

    Thanks for the responses!!

  • Fri, Oct 10 2014 11:51 AM In reply to

    Re: Modify divorce decree to remove responsibility for mortg...

    Frank C:
    adjuster jack, I'm somewhat of a cheap ass, and I was frankly hoping to avoid hiring an attorney if this turned out to be something simple. I have a lot more time than money.

    Well, there's nothing simple about any of this.

    But if you want to try it yourself here's a couple of resources.

    1 - US Legal Forms has a "Joint Petition to Modify or Amend Divorce Decree of Father Agreeing to be Sole Provider of Child." With a little creativity you can rename the form and modify it to suit your own purposes.

    http://www.uslegalforms.com/us/US-02041BG.htm

    2 - Wayne County court website has a packet of forms needed to file any other post decree motion. Scroll down most of the page and it's on the left side under court forms. Again, with a little creativity, you can modify it for your local court or the court that has the divorce case.

    http://www.waynecourtofcommonpleas.org/resources/forms

    You might check your own court's website for similar forms.

    The thing is, even if you are successful with the court, you'll still be subject to the whims of lenders and if any of them also want letters from Citibank you'll have a snowball's chance in h-e-l-l of getting Citibank to cooperate.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Fri, Oct 10 2014 7:20 PM In reply to

    • Drew
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    Re: Modify divorce decree to remove responsibility for mortg...

    Well the practical problem remains that if there is a flyspeck of an issue the lender or title firm is free to sit there and say we don't want your business until you remove the flyspeck  and even if the Pope writes a letter which opines there is zero exposure for the lender in your fact pattern, the lender or title firm is free to just sit there.  Been there over flyspecks over 100 years old must unlikley to come back to life ..so be it.  

     



  • Tue, Oct 21 2014 11:24 AM In reply to

    • Frank C
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    • MI
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    Re: Modify divorce decree to remove responsibility for mortg...

    Looks like the county has a self help center where I can ask questions and possibly submit the modification myself. But I would like to have some verbage together before I go in. My current decree states the following

    "  22.   &... Marital Home.  The parties are awarded the marital home as tenants in common.  The Plaintiff shall be awarded exclusive possession of the marital home located at (property address) more particularly described as: (legal description)

    The Defendant shall be obligated to pay the mortgage and home equity loan.  The Plaintiff shall, commencing June 1, 2009, assume and pay the utilities for as long as she occupies the home.  The Defendant shall vacate the marital home by May 31, 2009.  The Defendant shall be entitled to any of the appropriate tax deductions for the marital home for the year 2009.  "

    How should I change this to indicate she got the house and the debt, neither one of us owes the other anything for the house, and I'm no longer responsible for anything having to do with the house, debt, etc.?

  • Tue, Oct 21 2014 11:34 AM In reply to

    • Kivi
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    • Joined on Sat, Jan 1 2005
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    Re: Modify divorce decree to remove responsibility for mortg...

    One potential problem here is that your divorce decree really is only binding upon you and your ex. It cannot really obligate your creditors. However, you took care of your creditors with your BK.

    So, what you are suggesting might or might not work. Some lenders might be concerned that your ex has some "legal recourse" against you.

    You may still need to "shop around".

    The usual advise in these situations is to have the party that wants to keep the home "refinance" in his or her name only. However, her credit may not be good enough for that one.

  • Tue, Oct 21 2014 11:55 AM In reply to

    • Frank C
      Consumer
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    • Joined on Fri, Oct 10 2014
    • MI
    • Posts 4

    Re: Modify divorce decree to remove responsibility for mortg...

    She can't refinance because she's in the middle of a chapter 13 BK. We don't get along great, but I'm sure she would not hesitate to sign something saying the house is all hers...debts and all.

    BTW, the original mortgage was turned over from CitiMortgage to a company called Seterus. I faxed a request (remember fax machines?) to Seterus for a letter indicating I was no longer responsible for the mortgage debt. Low and behold, two months later (last week) I got  a letter from Seterus indicating that due to the discharge of my chapter 7 BK I am not responsible for the mortgage, and they cannot pursue me for payment. Who would have thought??

    So I now have one more piece of the puzzle.

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