Anjie’s divorce was finalized in 2010. She deeded the house to her ex-husband. Being unmarried now, she thought she could get a fresh start. Little did she know her past was still haunting her.
In 2013 she applied for a loan for a new house. She never thought that the old joint mortgage on the previous home would rear its ugly head, making it hard for her financing to be approved by lenders when they see it.
This is an unfortunate situation some divorcees find themselves in. Normally, after they get married, a couple would borrow for their home together and have both of their names put on the mortgage to qualify. In Anjie’s case, since the marriage turned sour, she should have asked the ex-husband to refinance the mortgage in his name alone. You see, although the divorce is already finalized, that only means that the wife and the husband are divorced only from each other… the loan from the lender is not affected.
The other spouse only realizes this when he or she gets turned down for a new mortgage because the debt load is too high. In a worst case scenario, the other spouse (the one who doesn’t get the home) is served in a foreclosure lawsuit when the ex-spouse stops making payments. It’s best to have the property sold or refinanced into one name during the negotiating phase of the divorce. After all, trying to get a former, bitter spouse cooperate several years after the divorce might be an exercise in futility.
If Anjie is fortunate and the ex-husband still makes his payments on time, she will still be able to find one lender who will look into the situation and the divorce paperwork and make an exception for the debt on the old house.
Call the GreatFloridaHomes team when you have questions about selling a property. We have tremendous resources in the legal field of professionals.