Posted on: 31st Mar, 2010 11:29 am
my wife and i divorced a year ago. at the time of the divorce the equity that we had in the house had pretty much disappeared and it was worth what we owed on the mortgage. at the advice of our mediator i signed over the house to her and no money was exchanged. a concern that i had was still being tied to the mortgage, my wife was unable to qualify to refinance the loan on her own. i didn’t want her to have to sell it just to get me off the mortgage and up root the kids so i agreed to it.
the mediator told me that there would be no negative impact for me being tied to this loan if i showed future financial institutions my divorce paperwork stating i was no longer responsible for the house. i am finding out now that this is not the case, as a result i can’t qualify for any loans or even to refinance my car as my debt to income ratio is too high due to this loan. my ex wife is trying to refinance as she would like me off the loan just as much as i do but has been unsuccessful thus far.
my questions are as follows.
1) am i now just stuck with this? i would think i would have some legal options to get from under this loan. i can’t move on or even think about buying my own place while tied to it.
2) as we live in california the mediator said that if she defaults or is late it will of course destroy my credit but seeing as this was the loan to actually purchase the property and not a refinance they can not come after either of us for the balance if she does. i am now wondering if this is true seeing as he was wrong on the other one.
3) lastly i was just given an inter spousal transfer deed to sign from my ex. i know this is to get my name off and put solely into hers but what is the advantage of doing this if i am still tied to the mortgage?
thanks in advance for your help and advise.
the mediator told me that there would be no negative impact for me being tied to this loan if i showed future financial institutions my divorce paperwork stating i was no longer responsible for the house. i am finding out now that this is not the case, as a result i can’t qualify for any loans or even to refinance my car as my debt to income ratio is too high due to this loan. my ex wife is trying to refinance as she would like me off the loan just as much as i do but has been unsuccessful thus far.
my questions are as follows.
1) am i now just stuck with this? i would think i would have some legal options to get from under this loan. i can’t move on or even think about buying my own place while tied to it.
2) as we live in california the mediator said that if she defaults or is late it will of course destroy my credit but seeing as this was the loan to actually purchase the property and not a refinance they can not come after either of us for the balance if she does. i am now wondering if this is true seeing as he was wrong on the other one.
3) lastly i was just given an inter spousal transfer deed to sign from my ex. i know this is to get my name off and put solely into hers but what is the advantage of doing this if i am still tied to the mortgage?
thanks in advance for your help and advise.
Hi eddietheed,
Unless your ex-wife refinances the loan in her name, you would be responsible for paying it. It'll be taken into account while calculating your debt to income ratio. Lenders will not be ready to give you a loan as you're already liable for a loan.
California is a "one-action" state. The lenders will be able to take away the property in case of a mortgage default but will not be able to come after you for the deficient balance. However, it will definitely have a negative affect on your credit report. Your score would get reduced by 250 points.
An inter-spousal deed will transfer the property from one person to another. It will have no effect on the mortgage. Though you sign the deed, you would be responsible for paying off the loan.
Take care
Unless your ex-wife refinances the loan in her name, you would be responsible for paying it. It'll be taken into account while calculating your debt to income ratio. Lenders will not be ready to give you a loan as you're already liable for a loan.
California is a "one-action" state. The lenders will be able to take away the property in case of a mortgage default but will not be able to come after you for the deficient balance. However, it will definitely have a negative affect on your credit report. Your score would get reduced by 250 points.
An inter-spousal deed will transfer the property from one person to another. It will have no effect on the mortgage. Though you sign the deed, you would be responsible for paying off the loan.
Take care