[MP49D]

My friend has a house. He bought it for $125,000 in 1999. It now has been valued by various realtors at $350,000. The townhouse is in a complex that have been selling townhouses like hot cakes even in this slow market. Now, if he stops paying the mortgage (he would sell but can't due to a person on deed refusing agree to sell) and the house eventually goes into foreclosure... what happens? It gets auctioned out for how much? The loan amount of $113,000 or for the selling value amount of $350,000? What if the lender gets more money for the house than what's owed does my friend get the difference? Sorry but I really don't know how this work? Thanks.

[ballengerb1]

Your friend would be better off trying to make a deal with the other person on the deed. Try to get them to buy it from him. Heck, offer to buy their willingness to sell for a few hundred buck, anything short of foreclosure. A foreclosure will not bring the full $350,000 and will also include bank fees and attornet fees that do not even exist yet. If there is money in excess of the mortgage and all fee your friend and the other person gets what's left. If there isn't anything left your friend and the other person still owe the difference. Foreclosure is a poor way to get out from under a stubborn part owner.
Please score my answer so I'll know if I helped you. Good luck.

[ScottGem]

Is he the only one on the mortgage?

If he stops paying and it goes into foreclosure then the lender will auction the property off. With that much difference between value and balance I doubt if it would go for less than the balance. In that case, your friend would get any overage minus foreclosure costs. But, more importantly, it would significantly affect your friend's credit rating.

If he's not the only one on the deed, he still can sell his share of the property.

What's the real story here? Who is the co-owner and why is your friend looking to dump the property?

[LisaB4657]

Another option that may be available to your friend is filing a lawsuit for partition of the property. That's where a judge orders that the property is sold and the proceeds distributed to the owners. Tell your friend to speak to a real estate attorney in the area where the property is located to find out exactly what options may be available.

[Fr_Chuck]

First normally don't expect it to sell for more. Part of the foreclosure sell is that they normally do it at auction, thus the buyer has to have the cash, not a mortgage, so those people will have to have that in their check book basically or the ability get it.

That means that only investers will be buying, people who want to make a ungodly profit at someone's misery.

The bank will normally bid up to their lien, and often are the ones to get it for what is owed. But on top of the lien, there will be foreclosure expenses, auction expense and more.

The person needs to use some form of court action to do something to sell the property,

[MP49D]

Both owner's are on the deed. He is the only one on the mortgage and the only one who pays the mortgage. In otherwords, he got approved on his own, he put the down payment and he is the only one who makes the payments but he was married at the time so she was put on the deed. I really don't know why VA law allowed that? I'm from NJ, and when my ex-husband and I bought our house. He was the only one with an incorporated business for three yrs of taxes. I had my own business too but my business was only two yrs running. So I was not listed anywhere, on the closing papers. I was told by our lawyer at the time, that I could not be on the deed due to being a liability to the bank. My friend situation is different. His "wife" at the time was a house wife with no income yet she was put on the deed. So bottom line is his "wife" refuses to sell. He was just notified by the townhouse association are putting a lien on the property for past due fees and an extra $300 a month on violations that she has caused. (she broke the glass patio door two yrs ago still not fixed, dog feces in the yard, garbage etc.) He doesn't have the money to continue this and so since she refuses his last offer of 60/40 split of the sale he now has no alternative but foreclosure? He doesn't have the money. IS there a better way... if so how? The homeowners association sent us a name of a real estate lawyer, they think that because my friend is the only one who pays the mortgage, he can put the house for sale without his "wife's" signature... is that true? So far his divorce lawyer doesn't know and seems to think we need her signature on the listing contract in order to put it on the market.

[ScottGem]

Wait a minute. The divorce decree should specify the disposition of the home. Foreclosure is far from the only alternative. I gather that she is living in the townhouse and he isn't. As part of the divorce decree if she was given the house, then the mortgage should have been transferred to her.

He needs to discuss this with his divorce atty first.

[MP49D]

Yes, I agree but his divorce lawyer says there is nothing my friend can do. I find this so hard to believe. She has been living in the townhouse, he left at separation. There is no agreement or pendite lite saying she gets to stay in the house. His lawyer says the house will be sold due to "Equitiable Distribution" in VA. But, her lawyer says my friend needs to take out a loan and giver the money so she can make the mortgage payment and live in the house for free for another 15 yrs and then they can renegoitate... Crazy! My friend said no way, not only because it would be craziness but because he can't get another loan... he's maxed out financially. (plus, in the beginning of the separation, he was giving er $3300 a month in separate maintenance so she would pay the mortgage and the car payments, etc. - all loans in his name only - and she neglected to pay them for three months and the townhouse almost foreclosed, the water was shut off, etc. He had to repair his credit it was a mess) So what is my friend suppose to do... keep getting violations and sent to court from the townhouse association due to her neglect plus pay the mortgage. My friend is so stressed out, he thinks foreclosure is the only way. His "wife" has bad credit so he can't sell his half to her. If she could get a loan for $113,000, he would be so happy to sign the mortgage over to her, but she can't. It's sad because he will lose his equity and have to repair his credit again. What do you think? Should he hire a real estate lawyer?

[ballengerb1]

You did not answer ScottGems primary question. Home ownership is always addressed in the divorce decree. The lawyers may disagree, sometimes that's what they are paid to do, but what did the decree state about the home?

[ScottGem]

The disposition of the home HAS to be spelled out in the divorce agreement. If only to say it will be sold and the proceeds split. If the divorce decree states it is to be sold, then she can't block it.

As to paying the mortgage, if the divorce decree specifies that he pay $3300 including the mortgage, then he can pay the mortgage directly and deduct that from the $3300.

[MP49D]

I'm confused. A divorce decree is given when they actually get a divorce... right? Right now there is no agreement because they cannot agree so no divorce. They are separated only. No court date, no judge. That's what my friend is pushing for, to go to court but his "wife's lawyer will not answer, they are stalling. The more they stall the longer she lives free and he keeps going into debt. Can my friend get this divorce decree now? And how, does he go to the judge directly? And why doesn't his divorce lawyer do it for him? Why does my friend have to wait for her lawyer to respond or agree? Sorry guys, I really appreciate your input.

[ScottGem]

Ok, until the divorce is finalized they operate under a separation agreement. That's the agreement that specifies he pay $3300/mth. Your friends attorney needs to do the job he's being paid for. Of course her attorney is going to stall and his attorney needs to fight the stalling. Go before the judge and force the issue. That's what your friend is paying him for.

[MP49D]

There is no agreement. They cannot agree, that's the problem. I'm confused. Isn't a divorce decree given when they actually get divorce? They are separated but not divorced. No agreement has ever been signed or ruled by a judge because there hasn't even been a court date. He was giving her separate maintenance but when she didn't pay the bills, the second divorce laywer he hired, found out that my friend did not have a court order to pay her that money so he stopped. Right now he pays the mortgage because it's in his name even though she lives there. What I'm trying to say is that the first lawyer messed up and made my friend pay spousal support when he legally did not have to because there was no legal document stating he had to. So how do you go about getting a divorce decree, and why does his divorce lawyer think we have to wait for her lawyer before we can do anything? If he can no longer pay the mortgage (changed jobs, lower pay, lawyer expense, etc.) and he goes into foreclosure, he loses but so does she. His "wife" will no longer have anything to fight for and he will be able to breathe financially. Will the foreclosure also affect her credit, even though it's already pretty bad? Do you still think there is a better way out of this mess? Thank you for your input. Scottgem and ballengerb1 you guys have been very helpful.

[MP49D]

Okay, so my friend should tell his attorney to go to the judge directly to solve this issue. THANK YOU SO MUCH! Hopefully, his attorney will get somewhere.

[ScottGem]

How long has this been going on? Sounds like your friend has had poor to mediocre representation.

[MP49D]

Hi guys, I just wanted to send you an update. My friend called his lawyer and told him that he will not be able to pay the mortgage on the townhouse due to the money he has to pay for the violations against the house from the homeowner's association. That scared the lawyer, I guess he figure if his client loses the house he loses his fees. Whatever the case, he suggested my friend calls his "wife" and letting her now the consequences of foreclosure. BANG! Just like that she agreed to sign the listing contract. My friend also told his lawyer to go to court and present this situation to the judge and his lawyer said OK. Can you believe this? After, he's lawyer protested that there was nothing my friend could do about the situation, now his lawyer says this is a great thing "we" are doing. Now it's "WE". Thanks so much you guys... THANK YOU THANK YOU THANK YOU>

[ScottGem]

Funny thing, with the exception of Lisa, none of those who responded are practicing attorneys. Yet we all gave the correct advice that got your friend's atty off the stick.

[MP49D]

I know, it's great. My friends happy, I'm happy, I LOVE THIS SITE! Thanks again.

[LisaB4657]

Sorry, Scott. I would have agreed but I had to spread the rep.

Fortunately (unfortunately?) most of the people who answer here have the benefit of life experience.