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Foreclosure & legal responsibility

2K views 11 replies 2 participants last post by  Greebo 
#1 ·
I made the mistake of signing a quit claim when I got divorced 4 years ago. I followed the mortgage online for about a year and my ex paid it faithfully. Since then he's lost his job, car, the house, and I just found out he's in jail for DUI, likely for a long time.

The house is up for sale, "contents included." I'm assuming the bank took the house. I haven't been contacted by the bank since I moved out four years ago.

There is nothing I can do financially about the sale of the house. But should I be concerned about legal issues? I have no idea how foreclosure works. I'm afraid someone's going to bang on my door one day and tell me I'm under arrest for failing to show up for a court date or some such charge. I realize it will be on my credit report, and there's nothing I can do about that, but I need to know that there aren't other issues that will arise.

Any knowledgeable input would be greatly appreciated.
 
#2 ·
To be clear, you signed a Quit Claim, but you were still named on the mortgage?
 
#3 ·
I know, I know. It was so dumb. :( I gave up legal rights to the house, and he promised to make every effort to get it remortgaged within a year. He never did. I didn't have a dime to spare to force him to sell when the year came around and it hadn't sold. But I realize the bank wouldn't care about the quit claim.

So my question is now that it's been foreclosed upon (or taken for taxes, I'm not sure which), what legal responsibilities do I have? Honestly, I'm hoping I can just walk away a little sad that the house and anything I left behind is gone. I just want to know that aside from my ruined credit no one is going to come after me.
 
#4 ·
I wish I could tell you that was going to happen, but I can't.

Since you are on the mortgage, you and ex share joint and equal responsibility for the difference between what was owed on the house and what it sells for. So - one of these days, the bank may very well show up knocking on your door (figuratively) and demanding payment.

Has the house sold? Do you know the sale price, if it has? Do you know the balance on the mortgage?
 
#5 ·
It hasn't sold. I think it's being listed at 2,000 more than what we paid for it. I don't know the balance.

I know that an ex-landlord lost her house and was legally required to make payment arrangements with the state. But I don't believe they went after her ex. I don't know if she'd had his name removed from the mortgage, but I can't imagine that she was able to. I do know he had a quit claim as well.
 
#6 ·
I think at this point your best option is to retain an attorney and get proper legal advice for your state. I would not want to give bad advice. It is my understanding that a QC will NOT remove liability from the mortgage, but laws vary by state.
 
#7 ·
Thanks, Greebo.

I did take a few minutes to do a google search. I'd better call the bank today. My worries about being hunted down are more valid than I'd hoped. :(

However, my ex is sitting in jail. I wonder what financial responsibility he'll bear. I'm guessing that if I take care of it, then he's off the hook, save for the credit rating. That stinks. But I should have thought of that when I divorced him and didn't force him to sell immediately. :(
 
#8 ·
Tell me about your overall financial situation - debt, income, expenses, etc. If they do come hunting you down, are you actually in a position to handle it? Your credit rating is really the least of your worries right now.
 
#9 ·
You're right - my credit rating is the least of my worries.

DH and I started Dave Ramsey just a few weeks ago. Oct 1 will be the first time since June that we are able to pay our rent and most of our bills on time with a few pennies left over to start our baby e-fund. We're not in a position to do much.

We just got custody of my step-kids, which means the end of child support, although they took it out of one more pay than they should have. We've had the kids most of the time anyway, so it won't add too much to our spending, only give us a snowflake.

I was able to reach the realtor for the house. She said it isn't being sold by the bank, but that it does say "sale contingent upon creditor's approval." I'm taking that as a good sign, that he decided to sell without telling me, and the bank hasn't officially taken over yet. I'll call them tonight and see what I need to do.

The mortgage is $1100/month and probably hasn't been paid in at least a year, although I don't know if he'd worked something out with them.

So I'm hoping if I call and plead with the bank I can get some kind of payment plan or allowance that will buy me some time while they try to sell the house. Unfortunately, based on the pics online, he didn't do some necessary repairs and it needs some work done that will make it a hard sell. It's so sad. It's a quad-level in a great neighborhood. We got it for a great price, but considering the new damages, I don't know that they'll be able to sell it for the same in this market. I'd rent it out to cover some of the mortgage, but with the quitclaim I don't think that's an option for me. And I don't have the money to cover the damages he's caused.
 
#10 ·
DH and I started Dave Ramsey just a few weeks ago. Oct 1 will be the first time since June that we are able to pay our rent and most of our bills on time with a few pennies left over to start our baby e-fund. We're not in a position to do much.
Excellent!

I was able to reach the realtor for the house. She said it isn't being sold by the bank, but that it does say "sale contingent upon creditor's approval." I'm taking that as a good sign, that he decided to sell without telling me, and the bank hasn't officially taken over yet. I'll call them tonight and see what I need to do.
Actually - I think you might not want to do that just yet.

You're in no position to do anything about it, as you just said, so why wake up the dogs. If they get your contact info, they'll be calling you at all hours giving you grief over this, demanding payment. If he's selling it and finds a buyer and the creditor accepts the sale - or even better if it pays off the loan - the problem goes away.

So I'm hoping if I call and plead with the bank I can get some kind of payment plan or allowance that will buy me some time while they try to sell the house. Unfortunately, based on the pics online, he didn't do some necessary repairs and it needs some work done that will make it a hard sell. It's so sad. It's a quad-level in a great neighborhood. We got it for a great price, but considering the new damages, I don't know that they'll be able to sell it for the same in this market. I'd rent it out to cover some of the mortgage, but with the quitclaim I don't think that's an option for me. And I don't have the money to cover the damages he's caused.
Your quit claim means you have no rights with regard to the property, only liability on the mortgage. If the bank isn't calling you about it, let it be for now.

Now its *possible* that the bank may find you and start hassling you - but given your situation, if they do come to you, then I think you could start off with two things:
1) The quit claim; and
2) Your budget for the last few months.

And then say, "Look, my ex husband was supposed to refinance this and get me off the mortgage. I'm sorry he didn't, but I am NOT supposed to be liable for this house anymore. Look at my budget. There's no way I can pay this. If you try to force me too, then I'm just going to have to declare bankruptcy and you'll have to spend money in court on that and you can see there's nothing left for me to pay you with anyway...so ... what do you want to do?"

But if they haven't reached out to you yet, why worry about it?

Yeah - you screwed up with the QC - ok, everyone screws up with money at some point. But you *were* supposed to be off of that mortgage - the ex let you down just like he let everyone else down. In your case, I don't see that you have any *moral* obligation to this debt, even though you do still have a legal one. I dunno how that would stand up in court, but w/ the quit claim, your budget, and the fact that stones don't give blood, honestly what's the worst thing that could happen if you *do* get forced into bankruptcy? Your credit is shot - and you already recognize that's not that important - and you get a break on your finances and a chance to even maybe get ahead and make restitution in the future.

I'm NOT advocating BR mind you - just saying, if they force your hand...so be it.
 
#11 ·
Thanks for the insight. Sleeping dogs are exactly why I was afraid to contact anyone to begin with. I'm ok if they want to hunt me down like any other creditor. My concern is if the bank takes over and I haven't responded to any letters (because they'd likely send them to the old address), that I could be charged with failure to appear or something worse. I don't know when it crosses the line from a credit issue to a legal issue. At some point in here past taxes will come into play, I'm sure. (Taxes were part of the escrow, so they were paid at least up until I left.)

Thanks for pointing out the obvious. I'll continue to lay low instead, and make some calls once we're in a better place to deal with things. My only concern is if allowing it to go into foreclosure would hurt me more than dealing with it now. So I'll just hope he'd made some type of deal with the bank when he put it up for sale, and wait and see what happens.
 
#12 ·
Thanks for the insight. Sleeping dogs are exactly why I was afraid to contact anyone to begin with. I'm ok if they want to hunt me down like any other creditor. My concern is if the bank takes over and I haven't responded to any letters (because they'd likely send them to the old address), that I could be charged with failure to appear or something worse. I don't know when it crosses the line from a credit issue to a legal issue. At some point in here past taxes will come into play, I'm sure. (Taxes were part of the escrow, so they were paid at least up until I left.)
Ok, disclaimer: I am not a lawyer, none of my advice constitutes legal advice. You should always seek out the advice of a professional when it comes to legal and financial matters.

That said - I *believe* that you cannot be charged with any 'failure to appear' if they have not served you with a summons, and they have to find you to serve you.

If they want to find you, they will. Your name and SSN are on their files. They can pull your credit report and get last known address, so if they ever decide to serve you with papers, they will. As for when it becomes a legal matter, it becomes a legal matter when the property goes to foreclosure or when someone files a lawsuit against you.

Thanks for pointing out the obvious. I'll continue to lay low instead, and make some calls once we're in a better place to deal with things. My only concern is if allowing it to go into foreclosure would hurt me more than dealing with it now. So I'll just hope he'd made some type of deal with the bank when he put it up for sale, and wait and see what happens.
Well, you CAN'T really deal with it now...

Best hope is that the property sales for more than what's owed. Next best is a short sale and you hope that they don't come after you for the difference. After that is foreclosure. But no matter what happens - if the property doesn't sell free and clear, if it short sales or it forecloses - and they come after you - well then we're back to "I can't pay you, I'm not supposed to have to pay you, and if you try to force me, I'm bankrupt...your move."
 
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