divorce situation - Posted by Jason

Posted by Jim FL on September 13, 2006 at 14:19:10:

Frankly, I’d leave it alone.
The only thing you can do for your friend, is support them emotionally during the divorce.

Let me tell you a story…

A very good friend of mine, bought a house, and did so with little cash to get in.
However, they lived in the house for 3 years, before getting divorced, leaving the ex-spouse with the house.
When the divorce began, both parties involved asked my advice…which since there was equity, was to sell the house, and split the equity, and begin fresh elsewhere.
They ignored my advice, and took advice from an attorney, who said, ‘quit claim’ to the ex-spouse living in the house, even though they had ZERO income, and could not afford the house.
Sure enough, about 12 months later, the house falls SEVERAL months behind, and goes into foreclosure.
Again, advice from me was sought, and knowing better, I made reserved comments, and offered some tips to save credit, sell the house, etc.
ALL went ingored.
The mess now…is an even bigger mess, as the loan was ONLY in the name of the one who quit claimed, and the other, deeded the house away, and then refused to move.
So, the house was brought current, fell behind again, when the tenant/ex-spouse stop paying, and the investor with the deed also stopped paying.
Now, the ex-spouses, one will have a foreclosure on their credit, the other will be evicted, and ALL equity, was lost.

Frustrating to watch, but, not something I could push to solve, as a friend.

So, give them a few tips, then step back, and remain away from then situation.

That’s the best bet to keep your friendship.

My friend FINALLY told me the other day, “we should have listened to you last year”…but, he’s not mad, just facing some financial issues for a while.
He’s still my friend though.

See, if you help them, and something works out, where both, or one gets paid, or not, they’ll blame you later for whatever they decide later…should have happened…even if that should have happened, is merely a fantasy in their mind.

Good luck, Divorce stinks big TIME!

Jim FL

divorce situation - Posted by Jason

Posted by Jason on September 13, 2006 at 13:05:55:

a friend of mine unfortunately is selling a home he just bought because of a divorce that he is going to go thru and I was wanting to get some advice on what he could do to get out from the house, and his soon-to-be ex easily. Here’s the deal:

bought house in July 06, joint ownership. She provided 20% donw payment and his credit and good job provided the loan. they are both moving out but her attorney is advising her not to sell until spring because she will “probably lose alot of the down payment in a sale now”. That doesn’t make any sense to me. If they offer it for sale at a certain price and someone takes that offer …how does it affect the numbers in any way whether they sell now or in the spring. I think this might be a ploy on her part to try and live there until the spring, my buddy has moved out already and is moving in with me soon.

He can’t afford to make the payments and she is on disability i think and doesn’t have a job. How can he get out from under the house ASAP. She doesn’t want to lose the down payment and he can’t continue to make the payments and find another place to rent. Payments are current and the loan doesn’t have a prepayment penalty. Is there any thing that could help him being this loan is only a few months old? I’m just trying to get some ideas for them.


Re: divorce situation - Posted by Don (VA)

Posted by Don (VA) on September 13, 2006 at 17:53:29:

I agree with the others. Best to stay out of it, except maybe to urge that they see a financial planner, especially a CPA who does financial planning.

I suspect what the attorney meant was that a sale right now, with very little appreciation (if any), plus the costs of the sale, will eat away much of the equity supplied by the downpayment. And that’s true. But–and this is where the financial planner comes in–the downside of waiting is that your friend can’t make payments, gets behind, damages his credit…if it goes to foreclosure before the whole thing is settled, then the ex is out on the street with no place to live. And it sounds as if the attorney is expecting prices to rise (if she’ll lose a lot of her downpayment now, as you note she’d be in the same situation next spring…unless the equity in the property increases, presumably through appreciation]. Given today’s real estate climate, prices are likely to remain about where they are or even go down…not up. But lawyers aren’t CPAs, and most aren’t investors, either. So…push for some sort of joint financial planning but otherwise stay out of it.

Re: divorce situation - Posted by FrankIL

Posted by FrankIL on September 13, 2006 at 15:57:24:

If hubby can’t make the payments and wife doesn’t have a job anymore they really have no choice but to sell now. Doubtful that they will even break even on this as there’s no equity once you consider fees and broker commissions. I think that’s all you can tell them. Don’t make their problem your own. They need to work this out themselves.