Posted by mj on October 27, 2005 at 20:20:29:
Great post Brian, Clay Ive dealt with someone like this and the only way I came out of it with my head above water was by playing hardball with this guy- listen to Brian Clay get a lawyer and act now before its too late- this guy is going to screw up your credit if you let him.
Messy divorce and a crazy person - Posted by clay willis
Posted by clay willis on October 19, 2005 at 19:56:33:
I am on a trust deed of 15%. My friend and her soon to be ex-husband own the remaining 85%. (community property) Her name is not on the deed. It just states Mr.xxx “a married man”, and me.
He has 'refi’ed the house up to the maximum so there is no equity left. He says he used the refi money to pay the monthly mortgage for the whole year. He has since then kicked her out of the home and she has moved in with her mother. He wants to refi the house again and use it to pay another year of mortgage, and/or fix it up and sell it, then get ‘cash out’ and move on with his life.
How can she move back in the house, when she can’t afford it? Is there any way to figure the mess out? I’m still on title for 15% and don’t want to end up going into foreclosure or whatever.
How much do miracles cost? The court date is Oct.31.
thanks.
Re: Messy divorce and a crazy person - Posted by Brian (UT)
Posted by Brian (UT) on October 20, 2005 at 12:16:41:
Clay
I’m assuming you made a error on you post, you say you are on a trust deed, which is the security for a loan. I believe you wanted to say you were 15% owner of the property and because its 15% versus 85% I can assume your a tenant in common.
I can also hope you didn’t sign any papers when this guy refinanced without you getting your 15% of the proceeds.
I can see three options here, one find out your friends legal status on the deed, you didn’t let us know what state this is in, so if it is a community property state she has potential claims on the 85%.
Sell her a very small portion of your interest, which will make her a tenant in common and give her equal possession rights to the home, thus the husband cannot throw her out. Or even sell her the full 15% secured by a straight note/td and let the divorce court handle it.
Third file a partition suit to force the sale of the property because it’s obvious this guy is out to milk everything he can from the property and he will screw you and you friend and it’s better to resolve it now.
Brian
Re: Messy divorce and a crazy person - Posted by Clay (CA)
Posted by Clay (CA) on October 20, 2005 at 14:33:51:
Brian,
You are correct in saying that we are ‘tenants in common’. We also live in Southern California so it is ‘community property’. Her name is not on the Title, nor on the Mortgage. I didn’t get one cent of the 15% proceeds from the refi. He claims I owe him of my 15% for rent (?). He also says I would be paying toward the equity of the house.
She really wants to get the house back once he is gone. The judge might toss him out of the house, because she has a minor too. (not his). But since he refied so many times the loan is 575k on the first and 100k on the second. And he wants to refi again to pay another years worth of payments, probably jacking up the loan close to a million. Who knows. But he is in not right in the head. He claims to be a ‘financial advisor’. He does mortgages from home cuz nobody can stand working with him at the ‘office’.
Anyway neither one of us can afford to live in the house, if the judge orders him out. The lawyer says he can’t do anything, i,e. refi, sell or whatever, until it goes thru court. He wants to settle out of court and essentially quitclaim it over to us, then refi it again so he can get cash out (negative equity i would think).
What is the best thing to do here? Should we sell, or try to keep it somehow? I think a million dollars would be nice. Maybe let it go to foreclosure and buy it back cheap?
Thanks.
Re: Messy divorce and a crazy person - Posted by Clay (CA)
Posted by Clay (CA) on October 24, 2005 at 22:23:23:
I signed the refi papers (the 15%) cuz he told me that ‘we’ could get a lower interest rate. He just said show up and sign some stuff.(?) He didn’t explain anything.
He said he put all the refi money (about 100k) to pay the mortgage for a year. I have no idea what happened to the rest of the money. I still didn’t get my 15% back. Now he says he wants to sell the house. And he wants to refi it again, to fix it up. Or refi and pay the whole mortgage for a year again. How can he do this? All he is doing is jumping up the loan, getting cash out (i guess), but the house isn’t worth 700k or 800k. I don’t see how anybody can buy it for that much. Then if they do, he/we will still be in the whole. (negative equity).
So how do you fix this? How do you deal with a crazy person? I suggest he take a long walk on a short pier.
Thanks…
Re: Messy divorce and a crazy person - Posted by Brian (UT)
Posted by Brian (UT) on October 21, 2005 at 12:08:27:
Clay
This guy is giving you a snow job, if anyone owes rent it would be him, he is using your 15% and I would remind him of that.
You say your friend would like to get the house back so I hope this property is listed as a divisible asset in her divorce filing and she is asking for the property and possession of it.
When you stated he does mortgages from home, red flags started flying everywhere. I saw Johns post and had the same feeling, this guy has probably committed mortgage fraud unless you signed the papers for the new loans. I would contact the lenders that are now on the property and check this out. If this is the case his mortgage days will be gone and he will have to find a new source of income. No lender I’ve ever dealt with would lend on the 85% because they could only foreclose on the 85% and getting a buyer who would even pay 50% for the 85% is very unlikely.
You need to jump on this now, in California while the divorce is going on there is an automatic stay in place, but he seems to be the type of guy that would ignor it because she’s not formally on title and if he has committed fraud I think he will be more than willing to sign over his share and get out post haste.
Brian
Re: Messy divorce and a crazy person - Posted by John
Posted by John on October 20, 2005 at 21:46:27:
I have no advise here but a question. What lender would allow a loan on a property owned by someone else. On a refi here all owners must sign the mortgage or trust deed to pledge security. Could he have forged your siginature on loan docs? I would seek an attorney about this because it does not seem possible (in my limited understanding) for a reputable lender to do this.
Just my $.02
Re: Messy divorce and a crazy person - Posted by Brian (UT)
Posted by Brian (UT) on October 26, 2005 at 16:52:15:
Clay
Now I’m convinced he is screwing you and his wife over. Even if he refinanced for $500k and pulled out $100k the payments wouldn’t be over $36k for the year so what did he do with the other $64k of which 15% is yours, plus he owes you for using your share of the home.
Why don’t you just humor him and give him your 15% in a quit claim, after all if the home is worth $800k you only have $120k at stake, and after he’s hidden as much as he can and lived there as long as he can he will just let it go to foreclosure, so if you give it to him now you can get it over with.
You think he’s crazy, not so, smart as a fox! Get a lawyer!
Brian
Re: Messy divorce and a crazy person - Posted by Clay (CA)
Posted by Clay (CA) on October 26, 2005 at 17:24:43:
Well, he doesn’t want the house. He just wants to refi again, get some money out(?) and be on his way. But there is no equity left. I suppose then he will sign over the house to the ex-wife and/or me. The year’s mortgage payments are ending next month and he says he is not paying for them anymore (plus property tax, insurance, etc). The house has been close to foreclosure twice already.
If it goes to foreclosure again, that will mess up my credit too, won’t it? The mortgage is on one of my credit reports.
Can I quit claim or sell my 15%? Does a grant deed outweigh a quit claim?
thanks.
clay
Re: Messy divorce and a crazy person - Posted by Brian (UT)
Posted by Brian (UT) on October 27, 2005 at 11:04:55:
Clay
Right now without hard numbers, etc it would be hard for me to say what I would do in your place. But here’s what I think, there must be some equity unless he duped a lender into giving him a high percentage loan to value loan and I don’t know how he did that due to his marriage status and California community property laws without his ex-wife to be signing off. I know I wouldn’t lend on such a set-up
Your 15% percent would have little value to anyone but an investor who would view it as worth a few dollars. Most people would wait for the foreclosure on this deal and for things to be wiped out, so it’s up to you to save what you have. Your partner is the wife and she needs the divorce court to help her.
I don’t think your the type to do this, but as a tenant in common you have an equal right of possession and I would move in, call a Realtor and rquest a marker analysis and inform them you want a price that will sell within 30 days, e.g. real market value less 5%. Tell the idiot he going to sell or give you a quitclam deed and get out or your asking the state agency in charge of his license to come in and review his business records and personal conduct (licenses can be taken away for lots of reasons, including moral interpretude). Plus you will file a lawsuit for the money you have coming which will result in all his records and documents plus those of the people he did business with being brought into court, and these acts can be presented to the divorce court also to be used in their decision making. The point is you need to start playing hardball, this guy has had control of the game from the beginning and if your not willing to fight you might as well forfeit the game. Maybe the wifes divorce attorney knows of a good real estate attorney that he/she could work with since both cases are really related at the moment.
Brian