Thread: Divorce, mortgage and deed issue

Originally Posted by usptxs

I have a rather complex problem so let me outline it...

Let me start by saying that I am sorry to hear about the divorce. I too lost my mansion to a classes ex-skank.

I am the sole person on an ARM mortgage with a principal amount of $697,000. The house was valued at $1.2 million in Apr. of 2007, so the current equity is $503,000.

The following people are on the deed which breaks down ownership by percentage:

Ex-wife and I: 25%
Ex-mother-in-law: 25%
Ex-brother-in-law: 25%
Ex-sister-in-law: 25%

Accounting for the divorce, I own 12.5% (25% / 2) of the equity in the home. 12.5% of the $503,000 equity amounts to $62,875.

Why on earth are all of the ex.*'s on your deed while not on the mortgage? And how did you get away with factoring a home value from April of 2007? Was it an appraisal? If so, why was the appraisal performed in 2007?

Obviously, I want out of this loan, and ideally, I want to be bought out for my percentage of ownership. All others on deed, have said they are willing to work with me, refinance the home under their name, and buy me out, but it has not happened yet.

Understand that if you'd actually get 12.5% without factoring in commission (it's pretty substantial on $1.2 million) were it to be sold, then you'd be getting a doubly good deal (appraisal from years ago, and I'm assuming it would appraise less today than from April 2007, and not including commission as a cost to deduct from your 12.5%). Also, why have they not bought you out yet?

I understand that I may need to get a lawyer involved, but I was hoping to get some counsel from other members on what my options may be, and just how much "leverage" I have if the other people on deed don't work with me.

There is no leverage. Either they agree to buy your 12.5% or the judge will force the sale of the home, then you may all be splitting up a different "value." Was the equity on the home not broken down in your divorce decree? How long ago was the divorce? Are you in the USA? If so, are you in a no-fault state? Too many unknowns here to give you any good advice. You definitely need an attorney and you need one today. I wouldn't tell my wife or another soul about it either.

Thanks for replying to my post Mr1. I realize I left out a lot of details, so I will try to answer your questions and make my situation a little more clear.

Why on earth are all of the ex.*'s on your deed while not on the mortgage? And how did you get away with factoring a home value from April of 2007? Was it an appraisal? If so, why was the appraisal performed in 2007?

My ex-wife and I were living at her widowed mother's house from 1998 through most of 2007. She could not afford her mortgage herself so we were helping her out. The current loan, which is solely under my name, was a refinance loan that closed in April of 2007. As part of the loan process, the home was appraised at $1.2 million. The loan was done under me because my ex-wife wasn't working at the time and her mom had a bankruptcy on her record. The ownership distribution was redone on the deed at that time as well.

Understand that if you'd actually get 12.5% without factoring in commission (it's pretty substantial on $1.2 million) were it to be sold, then you'd be getting a doubly good deal (appraisal from years ago, and I'm assuming it would appraise less today than from April 2007, and not including commission as a cost to deduct from your 12.5%). Also, why have they not bought you out yet?

The house is not going to be sold. My ex-inlaws are going to do a refinance loan under their own names. The plan is to do a "cash out" refinance, so they can buy me out, and then take me off the deed as well. A complicated transaction, I know:-) The amount to buy me out has not been finalized, but my 12.5% cut of the $503,000 equity is $62,875. By the way, the house is actually worth more now. It was completely remodeled from top to bottom. The house is in Millbrae, CA where values have hardly gone down at all in this real estate downturn. Take a look at Millbrae, California on Trulia. This house is 3000 sq. ft, and there are 1500 sq. ft. houses on the market currently on sale for $1.2 million.

There is no leverage. Either they agree to buy your 12.5% or the judge will force the sale of the home, then you may all be splitting up a different "value." Was the equity on the home not broken down in your divorce decree? How long ago was the divorce? Are you in the USA? If so, are you in a no-fault state? Too many unknowns here to give you any good advice. You definitely need an attorney and you need one today. I wouldn't tell my wife or another soul about it either.

Our divorce was official mid-2008. In our divorce decree, it states I am solely responsible for making mortgage payments on the house (I stopped making payments when we moved out in November 2007, but I do track the payments of my ex-inlaws), and it states that both her and I will get 12.5% of the profits should and when the house is sold. By "leverage" I meant what other actions are available to me if negotiations on my buyout amount stall, or the other parties do not cooperate.

I hope this helps if you are gracious enough to give me any more advice. I am going to get a lawyer, but I was looking to see if anyone else on this forum has gone through similar situations. Quite a complex situation isn't it? Not the best of business moves on my part, but sometimes it is hard to "stand up" against family, especially your wife:-) I would never do it again though, and hopefully I can come out of this OK.

Thanks again for taking an interest in my situation.

I think I follow you now. Those percentages were given by way of your father-in-laws will by way of devise. Well, sounds like you are in good shape from what you've described. It looks like it's going to come down to what the will stated and what the divorce decree says. I'm not sure if you accepted that stipulation, "..I will get 12.5% of the profits should and when the house is sold. " because the divorce attorney made it up or because the divorce attorney was following the will. Your new attorney will have to tell you that after close examination. If there's no language barring the sale of the home, then one would think that either they should pay up upon your departure, or the home would have to be sold to give you your due. That's the best I can say from knowing so little about it.

I would never do it again though, and hopefully I can come out of this OK.

I wish every young man in America would read that. By and large marriage is simply an absolute nightmare of a business decision.