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Posted: 4/14/2014 12:03:36 PM EDT
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, edit: I'd lose some of that in commissions and closing costs, etc for selling.  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.

 
Link 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.


View Quote


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.

Link Posted: 4/14/2014 12:34:42 PM EDT
[#2]
My stance on the $5k to refinance would be that I would rather sell the house and buy a new one, which is planned in about a year, but I will refi if I have to because I don't want to make things difficult for her, it's just that the assumption is a more clean financial move for me if I can appeal it.  My bank's loan officer basically told me that if I got denied for the assumption based on income/debt ratio then I'd most likely be denied my refinance without a co-signer.  My next step is to submit the application to the bank to see what their underwriters say just in case, because I'll take that hit if it means just getting it done.  



Part of the terms of the divorce were that she is not entitled to proceeds from a sale and she is not responsible for the negative difference if there is one.  
Link Posted: 4/14/2014 12:54:12 PM EDT
[#3]
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Quoted:
My stance on the $5k to refinance would be that I would rather sell the house and buy a new one, which is planned in about a year, but I will refi if I have to because I don't want to make things difficult for her, it's just that the assumption is a more clean financial move for me if I can appeal it.  My bank's loan officer basically told me that if I got denied for the assumption based on income/debt ratio then I'd most likely be denied my refinance without a co-signer.  My next step is to submit the application to the bank to see what their underwriters say just in case, because I'll take that hit if it means just getting it done.  

Part of the terms of the divorce were that she is not entitled to proceeds from a sale and she is not responsible for the negative difference if there is one.  
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The terms of your divorce settlement only really matter if/when you have to go into court and make the case that one of the parties is not following them.  Which is a double edged sword - if the judge decides someone is not following the terms of the agreement the solution he imposes might suck for both of you. If she takes you to court to force the issue she may force a sale, but then the judge might also void the part about "negative difference" as well.

Is her still being on the title "making things difficult?"  From a practical standpoint, not just an "I want this over with" standpoint?

I am not a lawyer; anything I say is based on what my lawyer advised me.
Link Posted: 4/14/2014 12:59:35 PM EDT
[#4]
All you have to do is get a few appraisals....then tell her she can buy your half at fair market value and you split everything down the middle...all expenses......That is what a court in Florida would do and a court in New York would do....Also that would work AGAINST you as well meaning you need to buy her half out if you stay...otherwise yes she can take you to court and force the sale of the house....you can ask me how I know as all those things happened to me....reasonable doesn't mean squat...you tried...you didn't get a loan so therefore you are not fulfilling your part of the agreement
Link Posted: 4/14/2014 1:02:30 PM EDT
[#5]
From a practical standpoint it will most likely prevent her from being able to buy a house when she remarries, but I don't know if that'll be a problem with her as a cosigner, but she hasn't expressed any specific plans to buy a house.  She is also getting positive benefits to her credit score because I make the payments at least 5 days early.  I think both of us just want it over because I'd like to push her completely out of my life.  



I've asked a friend of mine that is in the middle of a divorce for her attorney's name so I can get advice from someone that has KS divorce law experience too.
Link Posted: 4/14/2014 1:10:25 PM EDT
[#6]

Discussion ForumsJump to Quoted PostQuote History
Quoted:


All you have to do is get a few appraisals....then tell her she can buy your half at fair market value and you split everything down the middle...all expenses......That is what a court in Florida would do and a court in New York would do....Also that would work AGAINST you as well meaning you need to buy her half out if you stay...otherwise yes she can take you to court and force the sale of the house....you can ask me how I know as all those things happened to me....reasonable doesn't mean squat...you tried...you didn't get a loan so therefore you are not fulfilling your part of the agreement
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According to our settlement agreement she doesn't have a half.  She forfeited her entire claim to the house to me in the terms unless I failed to make 3 consecutive payments.  Although when I tell her about the failed mortgage assumption I might talk to her again about her purchasing the house at fair market value.  That would be a fairly equitable solution for both of us, and I can adjust my plans for buying, but part of that depends on my girlfriend's opinion about buying together.

 
Link Posted: 4/14/2014 1:16:36 PM EDT
[#7]
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Quoted:
According to our settlement agreement she doesn't have a half.  She forfeited her entire claim to the house to me in the terms unless I failed to make 3 consecutive payments.  Although when I tell her about the failed mortgage assumption I might talk to her again about her purchasing the house at fair market value.  That would be a fairly equitable solution for both of us, and I can adjust my plans for buying, but part of that depends on my girlfriend's opinion about buying together.  
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Quoted:
Quoted:
All you have to do is get a few appraisals....then tell her she can buy your half at fair market value and you split everything down the middle...all expenses......That is what a court in Florida would do and a court in New York would do....Also that would work AGAINST you as well meaning you need to buy her half out if you stay...otherwise yes she can take you to court and force the sale of the house....you can ask me how I know as all those things happened to me....reasonable doesn't mean squat...you tried...you didn't get a loan so therefore you are not fulfilling your part of the agreement
According to our settlement agreement she doesn't have a half.  She forfeited her entire claim to the house to me in the terms unless I failed to make 3 consecutive payments.  Although when I tell her about the failed mortgage assumption I might talk to her again about her purchasing the house at fair market value.  That would be a fairly equitable solution for both of us, and I can adjust my plans for buying, but part of that depends on my girlfriend's opinion about buying together.  


As I pointed out, and gglic, it doesn't matter what you agreed to if a judge decides the agreement is void.
Link Posted: 4/14/2014 1:20:55 PM EDT
[#8]
Well, she's not threatening it at this point, and I've contacted a law firm for a consultation, and meanwhile I'll start the process with my local bank to see if I can resolve it without having to worry about court.
Link Posted: 4/14/2014 2:04:08 PM EDT
[#9]
Did she execute a quit claim deed and give up her right to the house?  If so, that really evidences the intentions of the parties -- you keep the house and are only penalized if you default and place your ex in financial jeopardy.  If not, you'll need to work with a real estate attorney to get a quit claim deed.  

You'll probably be better of working with a mortgage broker than a single bank.  Explain to them what you need and use their recommended appraiser.  Appraisers seem to miraculously come up with the figures needed for financing, especially when they have a friendly relationship with the broker.  I engaged in some friendly banter with the appraiser, trading fishing stories and mentioning my divorce, etc.  Suddenly my appraisal ended up at about $10k more than what I needed to secure my refi and get my ex off the mortgage.  

Good luck to you.
Link Posted: 4/14/2014 3:07:38 PM EDT
[#10]

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Quoted:


Did she execute a quit claim deed and give up her right to the house?  If so, that really evidences the intentions of the parties -- you keep the house and are only penalized if you default and place your ex in financial jeopardy.  If not, you'll need to work with a real estate attorney to get a quit claim deed.  



You'll probably be better of working with a mortgage broker than a single bank.  Explain to them what you need and use their recommended appraiser.  Appraisers seem to miraculously come up with the figures needed for financing, especially when they have a friendly relationship with the broker.  I engaged in some friendly banter with the appraiser, trading fishing stories and mentioning my divorce, etc.  Suddenly my appraisal ended up at about $10k more than what I needed to secure my refi and get my ex off the mortgage.  



Good luck to you.
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She didn't sign a quit claim deed, that is contingent upon my refinancing or needing it to complete the refinancing process.  I hadn't thought of a mortgage broker before, but it makes better sense.  When I bought my house, the lender sent their own appraiser because I'm on an FHA loan, but I'll see if I can find a good broker while I look around for an attorney.

 
Link Posted: 4/16/2014 8:02:47 AM EDT
[#11]
FWIW, here's the verbatim of the settlement agreement regarding the house.  I have a line on a lawyer now that apparently won't gouge me.







Petitioner agrees that he shall pursue refinancing in order to remove Respondent’s name




and liability for all remaining liability for the mortgage payment on the property. Respondent




agrees that upon the approval of this Settlement Agreement by the Court and Petitioner’s




successful refinancing of the property, she will execute a quitclaim deed to the marital residence.




Should Petitioner fail to make three (3) consecutive payments on the marital residence while




Respondent is still legally obligated to make payments on the property, Respondent shall be




entitled to immediately claim ownership of the property.
Link Posted: 4/16/2014 8:13:23 AM EDT
[#12]
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Quoted:
FWIW, here's the verbatim of the settlement agreement regarding the house.  I have a line on a lawyer now that apparently won't gouge me.


Petitioner agrees that he shall pursue refinancing in order to remove Respondent’s name


and liability for all remaining liability for the mortgage payment on the property. Respondent


agrees that upon the approval of this Settlement Agreement by the Court and Petitioner’s


successful refinancing of the property, she will execute a quitclaim deed to the marital residence.


Should Petitioner fail to make three (3) consecutive payments on the marital residence while


Respondent is still legally obligated to make payments on the property, Respondent shall be


entitled to immediately claim ownership of the property.


View Quote


Hell, that doesn't even say "reasonable" or "dilligently" or "best effort."  You are pursuing refinancing - it appears to me that's all you need to do, and are doing it.
Link Posted: 4/16/2014 9:03:00 AM EDT
[#13]

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Quoted:
Hell, that doesn't even say "reasonable" or "dilligently" or "best effort."  You are pursuing refinancing - it appears to me that's all you need to do, and are doing it.
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Quoted:



Quoted:

FWIW, here's the verbatim of the settlement agreement regarding the house.  I have a line on a lawyer now that apparently won't gouge me.





Petitioner agrees that he shall pursue refinancing in order to remove Respondent’s name





and liability for all remaining liability for the mortgage payment on the property. Respondent





agrees that upon the approval of this Settlement Agreement by the Court and Petitioner’s





successful refinancing of the property, she will execute a quitclaim deed to the marital residence.





Should Petitioner fail to make three (3) consecutive payments on the marital residence while





Respondent is still legally obligated to make payments on the property, Respondent shall be





entitled to immediately claim ownership of the property.









Hell, that doesn't even say "reasonable" or "dilligently" or "best effort."  You are pursuing refinancing - it appears to me that's all you need to do, and are doing it.




 
I just spoke to an attorney too, he basically said that if I can show that I'm trying, and as long as I don't make the judge angry or catch them on a bad day, and especially as long as I'm keeping the ex informed then most likely she can't do anything, because neither the court or I can force a bank to secure the loan.  The worst a judge will do is order me to sell via the normal procedure, at fair market value, but that they won't suddenly reverse and award the house to her because this was a settlement agreement, not a court ordered settlement.  He said they won't seize the house and put it up at auction if I'm making payments on time, and that they won't make me share the proceeds with the ex based on a previous section that I didn't feel like editing out personal information from to post it.  




He also said that her only cause for complaint in court would probably be if it is hurting her credit score, which it's helping, or if it prevented her from buying a house, which he said in his experience lender's will ignore this mortgage if she can show that I've been paying it on my own for more than a year.  It's been two.




So my next step is to get a mortgage broker to start shopping around for a refinance for me, then contact her and tell her I'm looking at my options.  I'm either going through a broker to refinance, going to wait and try the assumption again in 6-8 months, or I'm going to sell it in a year or so.  If I refinance and then sell a year later, then I'll get hit twice for closing costs, so I'll lose a lot of equity compared to just waiting to sell it.  If she takes me to court and I am forced to sell, I'll get a deadline from the court.  My house was on the market for two days when I put the offer in on it, and there was supposedly another interested a few years back.  
Link Posted: 4/16/2014 12:51:25 PM EDT
[#14]
Ask her to sign a quit claim.  Also my bank sent me paperwork and let me refinance at a lower rate without any closing costs or new appraisal needed.  The only catch was that the new loan was only for the amount of the total owed on the current loan.

Perhaps your bank, I had Chase for the loan holder, would agree to a new loan if you mentioned the no closing cost loans that Chase had offered?
Link Posted: 4/16/2014 1:12:41 PM EDT
[#15]

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Quoted:


Ask her to sign a quit claim.  Also my bank sent me paperwork and let me refinance at a lower rate without any closing costs or new appraisal needed.  The only catch was that the new loan was only for the amount of the total owed on the current loan.



Perhaps your bank, I had Chase for the loan holder, would agree to a new loan if you mentioned the no closing cost loans that Chase had offered?
View Quote




 
She won't sign a quit claim deed until it's needed for closing.  That was part of the original agreement in order to protect her interests in case I die before refinancing.  I have Chase, they're the ones that declined my loan assumption application.  Under an assumption you have about a $700 processing fee with the title company, but no actual closing costs.  I'm looking for a broker now, I'll ask them if there are any no CC fee refinancing deals out there now.
Link Posted: 4/16/2014 1:54:34 PM EDT
[#16]
I IM'd you the Chase bank person's information.  That is the person who handled my refinance.
Link Posted: 4/16/2014 2:32:14 PM EDT
[#17]

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Quoted:


I IM'd you the Chase bank person's information.  That is the person who handled my refinance.
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Thanks, I'll send him an email.

 
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