Who Gets The House? A Growing Problem For Divorcing Couples..
We are all aware of the real estate market conditions and how difficult it can be now to sell a home. There is also the issue of those adjustable rate mortgages and many families facing foreclosure because high mortgage payments they cannot afford.
So how does this affect you during a divorce? Dividing assets, primary the family home, has now become much more complicated. Here is one problem. Let's assume the husband and wife divide the martial assets so that the wife and kids get the family home. Both of their names are currently on the mortgage with the agreement that the husband's name will be removed from the mortgage a few months after the divorce is final.
When the wife attempts to get new financing on the home, she is rejected by lenders. She cannot qualify with her income and credit rating alone. Her husband remains on the mortgage and now he cannot purchase a new home. He also worries that his credit rating will be negatively impacted should his wife stop making the mortgage payments. A real life example is a divorced Virgina woman who is facing possible jail time for contempt of court because she has been unable to remove her ex-husband's name off the mortgage. She has been repeatedly rejected by mortgage lenders and has been unable to sell the home. Her ex-husband wants the court to force her to sell the home at a public auction.
This is a serious problem facing many divorced couples in the U.S today. Make sure to find out if you qualify for a new mortgage before accepting the family home in your divorce settlement. You may want to sell the home instead and rent.