Conference quark::human_relations-v1

   Can you rent it out until you can raise the extra money you need to
   sell it?  Perhaps you can find a tenant interested in a rent-with-option
   to buy type of agreement?

   Depending on what type of mortgage you have and how long it would take
   you to raise the required money, refinancing to an ARM with a lower
   interest rate might also be an option - the idea being that you could
   put the house on the market at an attractive price before the rate goes
   up.

   You might also want to talk to a realtor and/or a loan officer about your
   options - you might be able to take out a personal loan of some sort to
   finance the difference.  I would be really wary about keeping the house 
   any longer than you have to though, since there is a real danger that 
   either interest rates will go up or housing prices will fall further.

	Sharon

    If your income and your house's market value is sufficient, you could
    try a rate and term refinance under your name only.

    This idea isn't for everyone, as it involves trust.
    
    My husband and I were in the same boat.  We are currently separated. 
    We own a condo, both names on mortgage, with an ajustable rate.  I
    could not afford to live there myself and take on the full mortgage,
    especially with the constant worry that the rates could start rising
    and my income won't.  I also did not want the hassles of finding a
    roommate and the headaches that could accompany it, so I opted to move
    out and rent.  When it comes time to file, I will sign over a quit
    claim deed to him, but that of course does not protect me as far as the
    bank is concerned.  If he fails to meet the mortgage they will still
    come after me.  We discussed this at length, and I trust that he will
    make the payments.  He has given me no reason not to trust him in the
    past, and he has a good, stable job with a secure company and lots of
    promotional opportunities.  It made more sense that he keep the condo,
    since his earning potential is a lot higher than mine.
    
    We discussed the options of refinancing but that means paying off the
    old mortgage and incurring the loss, plus closing costs, etc.  It
    wasn't feasible.  If we both moved out and rented to a third party, we
    could not ask for the price of the full mortgage, and would each have
    to assume part of the difference plus pay our own rent and other
    miscellaneous bills in our new places.  Needless to say, the condo kept
    us together for longer than we would have liked.
    
    All a quit claim deed does is sign over the interest to the other
    person.  When that person decides to sell and if there is a profit,
    they take the entire profit.  If there is a loss, then they would also
    incur that loss.  A lot of people wouldn't opt for this, but we saw it
    as our only way out, given our financial situation at the present time.
    

A quit-claim deed is a bad idea.  The reason is that the person who "moves out"
is still legally on the hook for the full mortgage and this can cause big
problems should they want to get credit in the future.

The best way to do this is for the remaining spouse to refinance under their
name and "buy out" the other spouse's interest, usually calculated as half
the difference between current market value and mortgage balance.  That ends
the financial relationship.


				Steve

    I had no problems at all with my rental application for my new
    apartment.  I had already established my credit, and have not run into
    any difficulties to date.  In fact, I was able to secure my new
    apartment ($755/month) on a secretary's salary (and I had to list I was
    responsible for the mortgage on my application even though I wasn't
    paying toward it), so that to me says a lot!
    
    If you're going under the assumption that the person moving out has no
    credit to his/her name whatsoever then I understand your viewpoint. 
    However, it has not come back to haunt me yet.  I have had an extremely
    good credit rating for over a decade now.  But, who knows... maybe
    someday I will have to eat my words.
    

    Unfortunately, there are no clean easy answers.  I for one have been
    there too.
    
    Assume : Not yet divorced.   First to do is have one person with full
    title to the house; you.  This avoids serious hassles with process of
    disposing the house in what ever form you choose.  Second, as part of
    the decree, the party taking over title ( assumme you ) agrees in the
    legal - >on file with the court< - stipulations that you assume full,
    wholey and exclusive responcibility for mortgage.  This means if you
    fail on paying & mortagee goes to him for cash, he waives the paper and
    says go see you.  If they still come after him & you do not pay, he
    sues you.
    
    Yup, sounds bad, but look at it this way.  No free lunches in the world.
    You gained the right of title to give you tremendous flexibility - 
    you can sell, rent, continue to live ..
    there & he cannot hassle you.  The cost of that privilage now gets
    fully shifted to you.  In effect thats not too bad and its really no
    different than if you had bought a condo under your own name anyway.
    
    
    Nice part is you are now in drivers seat especially since you said you
    can afford the cash flow to keep the existing payments.  Remember, bank
    only cares to receive its check once per month.  All things being
    equal, keep the house, wait out the market or until you >have< to dump
    and take the loss.
    
    Sorry, one last item on losses.  IRS says that if this is your primary
    residence you incurr 100% of the loss.  There is no deducting on your
    return. :-((   This is just another reason to hold on if you can.  Its
    damned expensive to get out in more than one way.
    
    Assuming you keep the house :
    	- So why refinance?  More than likely the market value is less than
    mortgage.  If so, many refinancings are at 80% of current market value. 
    The rate % may be cheaper  but do you have / want to come up with the
    20% cash ++ and fork it back to the bank?  I personally opted not to.
    	- Keeping the house with title = you can get a roommate to share
    costs.  The ex can scream, rant & rave but really has no say in the matter.
    	-  Keeping it means you are clearly at market risk to further
    depreciation / appreciation   as well as interest rate risk to the
    same.   My feeling is that over the next year you will not see a big
    jump up in the interest rates, hence you buy yourself another year ++ or
    so of time to make up your mind.
    
    
    Well if you decide you cannot keep the house & still assume that market
    is less than mortgage ( i.e. "not worth anything ...) :
    	- You with title, have full authority to make decisions as to
    offering price, settle price & so on.  That is REAL important. TRUST
    ME.
    	-  Since you still owe the mortgage, got to come up with cash or
    work on getting an unsecured ( read "expensive %" and "short" term loan
    with the bank) loan for the difference.   Again, sorry , no free
    lunches.
    	-  You could try for negotiating a "deed in lieu of foreclosure" or
    some such concept.  This means that the deed holder gives the bank the
    pink slip and the bank does not come to you for the difference.  No
    free lunch here either.  The bank may not want to take on additional
    real estate etc etc  and thus may not go for this deal that primarily
    benefits you.  Its a risk, but give it a shot if you must.
    	- Then there is the "Donald Trump" strategy.  You tell the bank if
    they dont conceed a lot to your terms, you threaten & do, declare
    bankruptcy.  Its a loose / loose strategy, but it can work to get you
    out from a debts - primarily mortgage if your total assets are quite
    less than the total debts. 
    
    All else being equal, keep it, get as much under your title and
    responsibility as possible.   
    
    Chin up, so far anyway, no one has ever died from this ;-)
    
    /t
    

    Exactly my point.  We had lost over $30K in the condo (townhouse), so
    the thought of refinancing (which means paying off the old mortgage and
    incurring that loss) was impossible.  We just didn't have the money.
    
    I was told the same thing; if by some off chance my husband stopped
    paying the mortgage and the bank came after me, to simply delcare
    bankruptcy.  Plus, I had the full support of my parents that if my
    credit ever did go sour due to the condo then they would co-sign for
    anything I needed while my credit rating was being repaired.
    
    The quit claim deed was our only option, given today's market.
    

    
    I may be a bit fuzzy on the quit claim deed part...
    
    My recollection was that executing this deed insures that when either
    party dies, their interest in the real property does not automatically
    become the property of the other.
    
    Nice if he dies, not so nice for you... :-)
    
    If I am correct, I highly recommend executing the deed.  No sense in
    giving an ex a "free lunch" at your demise.
    
    My past recommendation was to go even further.  Get FULL
    title to the property.  Dont just change the way the property is owned.
    
    /t

    
    
    Thanks for all the suggestions, both on and off-line.
    
    .7 is what I want to do.  
    
    To answer some questions:
    
    	refinancing is not possible as the morgage is higher than
    	80% of "fair market price"
    
    	selling is not possible unless we luck-out because we need to
    	sell it for about $10,000 above the market price.
    
    The fundamental problem here is that we have no savings to speak of.
    Or we won't once we pay off the mediation lawyer.
    
    I would really like to just take it over.  I am agreeable to keeping
    a dollar amount of both of our investment into the townhouse.  Then
    as I take it over, my dollar amount grows and his stays the same. 
    Hence our relative percentages of input change in opposite ways.  
    Then I would split any profits with him based on the percentage of
    input.
    
    My husbands concern, which is quite valid, is that if I got layed off
    and I couldn't get a job fast enough, that I would go bankrupt.  And
    since sueing someone who's bankrupt is pretty useless, then he's in
    real danger of losing everything he saves.  If I don't lose my job,
    then I'll be fine.
    
    I think our only real option is to put it on the market at the price
    we want/need and not budge.  I can be reasonably well-assured that it
    won't sell and get a roommate.  In the meantime, I can try to save
    money to sell.
    
    Please let me know if you'all see any holes in this.
    
    thanks,
    Rachael
    

It's pretty unusual for a buyer to offer full price, especially if the
property has been on the market for a while.  In fact, according to my
mother (a former realtor), the longer it sits on the market, the less
likely that a prospective buyer will offer close to the asking price...
although obviously if the market rises significantly, then you could
luck out.  You might want to ask a realtor about the advisability of
putting it on the market right now at the higher price, since that might
hurt you in the long run.  They might also be able to advise some changes
you could make to the property (decor, etc) that might help it sell for
more.

    Sharon

Please make sure that whatever you decide on is approved by a competent lawyer.
It will save you many headaches later.

I'll stand by my comment that a quit-claim deed is not sufficient.  I've seen
too many men (largely) complain that, even though they signed a quit-claim
deed relinquishing their rights to the house, that banks still considered
the mortgage debt theirs.  It might not be a problem renting an apartment,
but it might be when buying a new home.  Also, the bank doesn't care about
what a judge says or what a quit-claim deed says.  If both of your names
are still on the promissory note, both of you are separately and completely
responsible for the loan.

			Steve

     I have been there also.
    
     As part of your divorce agreement (in MA) you (and your ex_to_be) 
    must complete financial disclosure statements to be submitted to the
    court for approval of the financial arrangements. It was explained to
    me that the court wanted some assurance that I would not be dropped
    into bankruptcy or welfare as a direct result of the divorce. I guess
    this basically means that even if you feel you can afford the financial
    arrangements, the court might think otherwise.
    
     Also, my divorce agreement included a statement which basically said
    that I assumed full responsibility for the house and associated costs.
    Though I'm sure this does not completely disavow my ex's mortgage
    responsibilities, it went a long way towards making me ultimately
    responsible for the mortgage or any other costs that may be incured if
    something happened and someone went after my ex for money. Her lawyer
    was satisfied with the statement as was the court.
    
     Enough of the stressful legal stuff though. I ended up with a house
    requiring lots of work and for the past 2 1/2 years have struggled 
    psychologically to hold things together. Yes, it was my choice so I
    shouldn't complain too much. I guess my message is just that things
    that may seem "manageable" today probably won't look that way down
    the road when the reality of a "new life" sets in. Personally, I
    now wish I had dumped the property even if I took a bath and didn't
    recover much, if any, of the equity. As I look back I would have been
    much better off by (1) making a fresh start (2) not struggling 
    financially and (3) not having to worry so much about all of the
    stress involved with rebuilding my life at the same time as maintaining
    the house.
    
     I had put a lot of my heart and sole into the house before the divorce 
    and thought I could continue to make it my home after the divorce. The
    truth is there are memories that keep coming back and I seriously
    question my ability to someday build a new life with a new partner and
    possibly even a family someday. These definitely are not thoughts that
    crossed my mind when the decisions were made but as time has passed, 
    these thoughts have made me regret the decision to keep the house.
    
     One more piece of unsolicited advice, it sounds like things are 
    really tight for you financially, try not to feel bad about the too, 
    it happens to a *LOT* of people, myself included. Remember that the 
    lawyer costs are VERY CLOSELY tied to the level of cooperation you 
    and your SO can maintain. My advice above *everything* would be to 
    maintain a sense of cooperation as much as is absolutely possible. 
    There will definitely be times when it's worth it to bite your tounge 
    and ask if "it" is really worth arguing about.
    
    
    Best wishes...
    
    Glenn

    
    You say that you cannot afford to sell at market price.  That leaves
    only 2 options :
    	- Keep the house
    	-  look into deed in lieu of foreclosure.
    
    Your house is only worth market price and no more.  Offering it higher
    than market will yield either 
    	- counter offer at or below market
    	- No offers at all
    
    Reality dose :  Must be honest with  yourself.  What would make somone
    pay THOUSANDS of dollars more for it than it is really worth; as
    defined by "market", when a buyer can easily go somewhere else in this
    real estate glut market?   Furthermore, a real estate agent will not
    spend any time and effort to market somthing that he /she feels is a
    useless or loosing proposition.    Bottom line, holding on for an
    unrealistically high price puts you in exactly the same position as
    doing nothing.  That will only frustrate you and your agent.
    
    /t

I went through this a year about with a condo with is worth about
$15,000 less than we paid for it.  Obviously the bank wants about
$20,000 to re-finance. Not an option.  It doesn't matter whose name
is on the title.  It matters whose name is on the mortgage.  If one
person defaults, the bank comes after the other person on the mortgage.
The only way to get your name off is re-finance.  Catch-22.  

We wound up doing a couple things.  He has the condo.  He is responsible
for the mortgage.  I have no equity in the condo (there is none). If he
misses a payment I take possession and he forfeits any interest in the 
condo.  I signed a quit claim on the deed, but my lawyer is holding it
in escrow until the house is refinanced and my name is removed.  He has
5 years to refinance.  You can negotiate a series of compromises to
make you both feel better about it.  Basically, as long as your names are
on it, you're stuck with it.

Mary-Michael

    Good suggestions, M-M.  My husband and I have not yet filed for the
    quit-claim deed, so your input will definitely come in handy!
    
    Thanks,
    Roberta