Posted on: 03rd May, 2011 04:10 pm
i believe that i am headed for divorce, not of my doing. i don't believe that we will be able to sell the house for the total amount of our two mortgages. making it more complicated is that i work for the bank from which we took out the second mortgage. i have worked really hard to keep my credit score up, it kills me that my credit and future ability to secure a new home for me and the kids could be made that much more difficult because of my situation. any advice on how banks handle this sort of thing? we have little in liquid assets, and i'm sure they will be used to either fix up the house to sell it or in attorney fees during the divorce.
thanks
thanks
If you both are on the loan, the only way to come clean from out of the mortgage is to sell or refi. If you are upside down, then there is no real hope. Whether the court orders you to sell the home or not, if its upside down, you cant. You could try, short sale, short refi, deed in lieu or foreclosure. Any of these events will hurt you in obtaining a new loan in the future as lenders will take all these basically same as foreclosure. If you know you are to be divorced, try to get a new home now, and qualify off both payments. Atleast you will have a roof over your head, and worry about your credit later. You also need to know what type of security is against the house. A Trust Deed or a Mortgage. Very different. You also need to know if you are in a recourse state or not. You loan contract should state if you have a "power of sale" clause, that is basically the right to trustee foreclosure. In CA, the property is the only collateral and all the lender can do is take back the property. You can also have tax implications. If you take a loss on the property, IRS takes that as income against your taxes. Most people are eligible for the exemption. Please talk to a CPA about the taxes, and have an appraisal performed on the property so you and the spouse know where you stand on property. Good Luck. Contact if needed.