[CWakaCL]

[F] First of all, I would like to Thank anyone who reads this and can help me help my brother out. I'll try to keep straight to the facts and to keep it short but this is coming from a long winded person. My brother and his then girlfriend bought a house together @ 2 years ago. It had to be completely "gutted" and "over-hauled" big time. They basically did all of the work themselves and with help from some professional friends, electrical, plumbing etc. etc. I should really say that my brother did the majority of everything because he really did. They have been living there for last year together. It was really my brother's job and my brother's money that allowed them to afford buying this home at all. My brother bought this home with the understanding as plans they had made as a couple to get married and have kids someday. Well @ 2 weeks ago she just up and left... without any explanation of any kind except that "she wasn't happy" This was an 8 year relationship and my brother gave/did everything for this young lady. (She is only like 22- 23 and my brother is 26 ) Aside from the fact that his heart is completely broken and he's just a complete wreck... She is now saying that she wants 50K from my brother for "her" portion of the house. Here's where it gets complicated. Her name is on the mortgage too ( I know my bro asked my family's advice and none of us thought it was a good idea BUT she said she would leave if he didn't put her name on it... Sighs); however, she only makes @ $8 or $9 dollars an hour and only contributes a total of $600/mth that she gives to my brother. My brother pays for everything else, he pays all of the bills and takes care of everything... which is way more than $600/mth. I am saying it is not 50/50... it's not even close to anything "fair" or "even". She has no concept of "reality", bills or even an understanding of the word responsibility. They were getting ready to refinance the loan to help pay off some joint credit debt. (mostly improvements to the house) and then some personal debt (her own personal credit cards are racked up to @ 7K) and then also were to complete one more project on the house. The refinance would have allowed just enough money to do those things and would have also "lessened" the load. She doesn't understand the refinance and somehow has gotten into her brain that my brother is getting 100k for the refinance (that hasn't happened yet or who knows if it will at this point) and she wants half of it. I know no one can help her for being such a TWIT but here's the deal... my brother would like to keep the house, he would like to refinance but is not sure if he can now on his own. He also doesn't have 50K to "buy her out". What rights does my brother have to this property if he's the one that has paid mostly all of the expenses... is there some kind of law that protects a person in this kind of situation? Even if they sold the house together after they paid Peter, Paul and Mary there probably would not be 50K to be had! She's totally trying to take advantage of my brother. Originally she was talking about just wanting some kind of vehicle (yes, "her" car actually belongs to my brother... another nice, sweet thing that he did for this B*tch) to have her credit cards paid off (she's probably really racking it up now) and a couple K's in cash... which sounds "more" fair than the other scenario but is still a load of crap in my eyes. In exchange for these things she was going to sell her portion of the house to my brother for $1... now she's had time to think about things and is probably realizing how hard her life has become and how hard it is to live off $9/hr. and has just gotten plain old GREEDY. I just feel so bad for my brother he's completely devastated and then to have this "worry" on top of everything... all I can say is Thank God there are no children involved. Then to add injury to insult she has been talking to another guy for quite sometime before she left and my brother happened to stumble upon this :mad: My brother is such a good guy and he's excuse my french busted his a*s for so many years to get to where he is and he's sacrificed so much of what he has already for her! She's always been unappreciative of my brother and his many kindnesses. I think that he should have a "free" consultation with some kind of lawyer. (There's not a lot of $$$ to be had here) If anyone with a "legal" back ground could shed some insight on this matter... it would be much appreciated. I am so worried for my brother's well being and at this point I'd like to help out as much as I can. Honestly, I was "afraid" that this may happen because of the demand that she made from my brother for her to be on the mortgage. I feel now that this was kind of her plan all along! Oh, also... one more thing she did give him her $600 towards things even though she is no longer "living" there for this month. What if she decides not to give my brother anything for this next month... what can he do if anything? Thanks again so much for whoever helps answer some of these worries of mine. I really appreciate that fact that this website even exists... it has a lot of helpful stuff and people that are a part of it. THANKS :)

[Dr D]

Since she is half owner of the house, the path of least resistance would be to sell the house and split the proceeds. Your brother could ask for a greater share, based on his greater contribution, but I suspect that she will not agree to this.

He could do a "Cash Out Refinance" of the home (provided that he can qualify for the higher payment on his own), and offer her 50% of the NET equity in the home. That would be: the appraised value, less the mortgage pay-off, less the closing costs for the new mortgage = net equity/2= money to her. The maximum Loan To Value ratio on a cash out refi is 90%. Since property values have fallen in most markets, the question would be whether to do the refi now, or wait for the value to fall a bit more.

[CWakaCL]

Thanks, Dr. D for your input. Since things are so fresh, I know that he really doesn't want to sell this house... he's put so much of himself into it. My concern is for the real estate market too... right now doesn't seem to be a "good time" to sell. I know the Feds just cut the rates again but who knows when that will actually go into affect. He should hold tight for a bit anyway like you said. The "Cash Out Refinance" sounds like the way to go if my brother can qualify for that. That was more in-line with what I was thinking that she deserved. (Well, besides a swift kick to the ! :rolleyes: ) I'm trying to run the scenario through my head. Would you happen to know or can you explain to me how her name will be taken off the mortgage? Will my brother need a lawyer to draw up paperwork for this agreement or can it solely be settled through the refinance process? I do own "Mortgages for Dummies" I'll teach myself more about the "Cash Out Refinance" that you suggested Dr. D. THANKS :)

[Dr D]

Yes the Feds cut the Fed Funds rate by 1/2%. That cut mainly affects short term borrowing, such as HELOCs which are tied to the Prime Rate,Adjustable Rate Mortgages which are tied to short term indices, credit cards etc. As a matter of fact, 30 year rates had dropped prior to the Fed cut, and dipped a bit more following the cut; but over the last few days have crept to a level higher than before the cut.

In most cases the title company handling the refinance could do what is needed. They could prepare the agreement between the parties instructing the title company to give her a certain $ amount at close. They would also prepare the Quit Claim Deed removing her from the property. I guess that an attorney could be involved, but the title companies do this sort of thing at a very reasonable cost.

Good Luck

[ScottGem]

You said she was on the MORTGAGE. You did not say whether she is on the DEED. Those are two different things. If she is not on the deed, she is entitled to only what she put into the house in terms of money unless they live in a state that recognizes common law marriages.

The $600/month she contributed to living expenses could te attributable to that not to an ownership of the house.

However, if her name is on the deed, then she is a half owner of the house. So what needs to happen is the house needs to be appraised. The balance of the mortgage is then subtracted from the appraised value. The remainder is the equity. That amount is divided in half and that's what she is entitled to, nothing more. He can then look to increase the refi to cover that amount and the refi would NOT include her name and shewould have to sign a quitclaim deed, deeding the property to him alone.

[CWakaCL]

Thanks Dr. D, that would be great if the title company could handle this and he didn't have to get a lawyer involved. I have a good lawyer but he is $300/hr! (yikes) We'll research that route and use the lawyer if need be.
Thanks, Scott, I'll find out today if she is on the title/deed as well. We live in PA.
You have both been helpful and depending upon what happens I may ask you a few more questions. I'll let you know how we make out! Keep your fingers crossed! THANKS