Mortgage and Divorce
Dealing with a mortgage and divorce is one of the primary property concerns that separating parties have. Family lawyer Julian Fox addresses that in this article.
When home prices are on the rise, one party is often able to refinance and buy the other party out. That’s the easy way to deal with mortgage and divorce.
Unfortunately, home prices are falling and people are seeing their equity disappear. Many people are forced to sell their homes and split the small amount of equity. This leaves some families in a situation where neither party is able to purchase a new home and they must rent a house or apartment.
Sometimes, especially if the home was bought on an adjustable rate mortgage and the “teaser rate” has run out, people find themselves “upside down.” In other words, they owe more than the house is worth. When this happens, you definitely need a family lawyer.
If the house has not been refinanced, you can walk away from the house. You are protected by anti-deficiency statutes.
Unfortunately, if you have refinanced, your options are more limited. All you can do is sell the house and take on the negative balance as community debt, with the parties bearing the burden between them.
It’s always painful to leave the family home. And with the real estate market the way it currently is, your choices are financially as well as emotionally painful. One of the hardest things I have to do as a family lawyer is help people with their mortgage and divorce issues.
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