Avoid Creating Problems During The Divorce Process

Reblogger Gabe Sanders
Real Estate Agent with Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales 3090099

For those who may be involved in a real estate transaction after or during an unfortunate divorce process, you may want to look at this post from George Souto to avoid issues that can arise:

Original content by George Souto NMLS #65149

Going through a divorce is very stressful, and when going through a divorce clear thinking is often challenging.  This is why those going through a divorce need to be represented by a team of professionals they can trust to give them sound and accurate advice to Avoid Creating Problems During The Divorce Process.  However, sometimes a trusted adviser provides advice in an area best left to another professional better equipped to advice in an area outside of their expertise.

This often arises with Attorneys who provide advice Real Estate related instead of directing their client to a professional better equipped to provide advice in that area.  I am encountering this more and more with divorce Attorneys giving bad advice during the divorce process about how the handle a home which is jointly owned by both spouses.  The advice provided often  creates unexpected problems later on when they want to purchase a home again.

A good example of this is when someone jointly owned a home with their ex-spouse and now is looking to purchase a home again.  A problem which occurs fairly often in this situation is when the Attorney advises his/her to Quit Claim the property to the ex-spouse, and in return the ex-spouse accepts responsibility for making the monthly mortgage payments each month.  In turn the other spouse is given a "Hold Harmless Agreement" by the court.  This sounded good, but is bad advice because a "Hold Harmless Agreement" does not remove the liability to the Lender for paying the mortgage. to her, so she agreed to the conditions.

So what happens is when the spouse who Quit Claimed the property to the ex-spouse wants to purchase another home, even though they have enough income to purchase a home in the price range they want, they cannot because they are still responsible for the mortgage on the home they Quit Claimed to the ex-spouse.  Even though they are no longer making the payments on the other property they are still on the mortgage even with a "Hold Harmless Agreement".  Because they are still on the mortgage the mortgage payment of the previous property will still be counted against Debt-To-Income (DTI) Ratios.

This gets further complicated because since this spouse Quit Claimed to the property to her ex-spouse they no longer have any ownership in the property, but still have the liability.  Not a good position to be in when looking to purchase a new property.  This is a lose lose position to be in.  This spouse is still owes the debt on the mortgage, but does hot have any ownership interest in the property. 

This can be easily avoided by contacting a trusted Lender in the beginning, instead of being guided by an Attorney who is not familiar with Lending guidelines.  Anyone who is going through a divorce REALLY needs to talk to a trusted Lender before they agree to anything about there current property.  Borrowers need to know what the pros and cons are for the decision they are making before they make it.  Contacting the Lender afterwords will most likely only end up producing very unpleasant surprises.

This is just one of the many precautions which need to be taken when someone going through a divorce can.  A divorce is very stressful and many times those involved are not thinking clearly during that time period. but during the processes they need to talk to those who will play a part in their future plans.  If purchasing a new home is in future plans, then a call to a trusted Lender before signing the Divorce Decree is a must to Avoid Creating Problems During The Divorce Process.

 

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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Rainmaker
4,047,399
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for reblogging the post. I missed reading the original post 

Jan 12, 2018 03:42 AM #1
Rainmaker
1,870,314
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Be careful how you untie the marital knot... got it. Thanks for the serving up a worthwhile blog on splitting up, how to watch your exit strategy to avoid oh oh later on when back on track and need to buy a new home sweet home Gabe Sanders !

Jan 12, 2018 04:26 AM #2
Rainmaker
3,564,206
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Gabe, I am working with a divorcing couple right now, and is a struggle to stay out of their drama!  They have a separation agreement filed so that each of them can move on.

Jan 12, 2018 05:14 AM #3
Rainmaker
4,650,577
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Thank you very much, Gabe, for sharing this excellent reblog selection.

Jan 12, 2018 06:21 AM #4
Ambassador
3,489,010
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gabe thank you for helping to share this information by re-blogging my blog!

Jan 12, 2018 11:57 AM #5
Rainmaker
476,660
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

This is an emotionally and financially tangled situation to find oneself in. It is ALWAYS best to seek the proper legal and financial advice in these situations. Great post.

Jan 13, 2018 01:05 PM #6
Rainmaker
4,308,742
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thank you for stopping by and taking the time to read my re-blog.

Feb 04, 2018 06:22 AM #7
Rainmaker
4,308,742
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for your comments. It’s always good to hear from you.

Feb 04, 2018 06:22 AM #8
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Rainmaker
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Gabe Sanders

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