Posted: 4/14/2014 12:15:27 PM EDT
[#1]
Quoted:
I got divorced about two years ago, here in the state of Kansas. We're a no fault divorce state, and the ex and I used the same attorney because we'd ironed out an agreement before going to get the paperwork drawn up. The divorce was mostly amicable/friendly, and we paid for about 2.5 hours with the attorney, divorced for about $1000.
In the settlement agreement I was awarded two joint financial liabilities that I held with my ex with her name still on the loans, a car and a mortgage for my house. The settlement agreement basically stated that I "will make a reasonable effort to remove" the ex "from liability from both loans." There was no time frame on the settlement agreement, just the ambiguous "reasonable effort" bit. I've never missed or been late with a payment. And the only provision written into the agreement for her was, if I missed 3 consecutive payments, she could take possession of the house or car, whichever was the relevant liability. That's not verbatim, as I don't have a copy of the paperwork in front of me, but I was the one that worded it to the attorney, so I'm pretty sure it's close to accurate.
Last fall I traded in the car when I discovered it would be easier than refinancing, so she's been removed from that liability. I recently tried to file an assumption of the mortgage with my mortgage lender. It took about a month and a half to try to process it, and they came back with a denial of the application, citing that my debt to income ratio was too high. I'm looking into an appeal of the decision based on some wonky math on their part, they're using my home office deduction as part of my debt and I had a one time tax deductible expense that is factored in, and they're only crediting me with 24 pay periods in a year instead of 26, so they're shorting me about $4-$5K in gross income in the calculation.
My question for this forum is, can my ex do anything, legally speaking, since it would appear that I can't get her name off the mortgage at this time? And, My ex offered a couple of months ago to buy the house from me for the cost of the principle, not the market value or consideration for the improvements, so that being an unreasonable option for my financial security, I refused the offer. Would there be anything she can do to force my hand in that if she were able to secure a loan with her fiance even if I haven't missed a payment, but just can't remove her name from the mortgage?
Otherwise, I am now talking to my local bank about refinancing, but going that route I will wind up losing about $5000 in equity because of closing costs, inspections and whatever else may be involved, I'd be better at that point to just sell the house and buy a different one. The initial conversation with the loan officer over the weekend offers about the same prognosis as the route with my current lender. I have $15K in equity if I sell the house for what I paid for it in 2009, minus what I'd lose in commissions and closing costs, etc. I have $12K in improvements since the divorce. I plan on selling the house in a year or so, but only after my girlfriend and I get married so we can buy "our house", but I haven't asked her to marry me yet, and I'm not going to rush into that just to appease the ex and get her name off the mortgage, and I'm not going to own a house on paper with my girlfriend until we've gotten married, so I'm not going to ask her to cosign.
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Having just gone through something like this, "reasonable" means "what a reasonable person would do". That means you don't have to make unreasonable efforts. Is taking a $5k hit on the refi unreasonable? Not sure.
I don't think she can force you to sell it to her for equity. She would go back to court and file a complaint that you are not complying with your divorce decree. The most likely outcome would be the judge ordering a sale, with the proceeds split (assuming this is a marital property state). She could buy the house at the sale (typically a public auction in my state), but she would be competing with other buyers.
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