Foreclosure in Miami>Question Details

Zee, Other/Just Looking in Miami, FL

If a house in my wife's name goes to foreclosure, does it affect me?

Asked by Zee, Miami, FL Sat Mar 24, 2012

My wife bought a house with her brother on title and mortgage documents. My wife and I got married and I am a Canadian and she moved to Canada. My wife's brother was paying mortgage and living in the house. Recently he is not able to make payments for couple of months and house may go into foreclosure. This has obviously eroded my wife's credit history as she is not even able to open up a new bank account. I am about to get my greencard and plan to migrate to US. I am worried how does all this affect my credit history in US and my ability to buy a house and /or maintain investments that I bring with me. Does this in anyone affect me..Would really appreciate any responses.

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Hello Zee,
It sounds like your wife purchased the home with her brother prior to getting married? Regardless which state you reside in, your name is not on the loan, you are not obligated. However, in the event the property goes to foreclosure or short sale, this will depend if your state is Anti-deficiency and if it has judicial rights to a foreclosure.

Now, lets go a little further, How does this affect you in the future? let say you are in a Anti-deficiency state and none-judicial foreclosure. Sometime this year or next, you need to finance a new property; you come to find that FHA financing will not be available because your wife today had a property go into foreclosure.

What is the solution? if you have not lost the property to foreclosure, i would act fast and try to short sell home. Speak to an attorney or a CDPE Realtor in your state.

In the U.S., there are nine community property states.

Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin

ROG, Inc
Frank Shamoo
Help U Short Sale
http://www.HelpUshortSale.com
Frank@ShamooTeam.com
1 vote Thank Flag Link Sun Mar 25, 2012
thanks very much for your responses. I very much appreciate that!

I have another quick question. We are planning to migrate to Texas which I believe has Community Property Laws, which I understand means that both wife and husband are liable for each other's liabilities. Does that affect me in future when I bring my money with me to US.

Also do you think, there is anyway my wife's name can be pulled out of property and mortgage documents and only her brother is liable. The mortgage payments are not done for almost 7 months amounting to almost 17k which is a huge amount. Is there a way, we can pay some minimum amount to get account in healthy state, pull out my wife' s name and then let her brother decide what he wants to do.
I know these are all questions where I will have to get in touch with an attorney, however would appreciate if you guyz could give some idea out of your experience.!! thanks
1 vote Thank Flag Link Sun Mar 25, 2012
The best advise I can give you is to GO SEE A LAWYER.
Don't hesitate to spend this money and do not expect
any legal advise in this forum which has no competence
in legal matters.
Good luck.
Best to you
HANS
1 vote Thank Flag Link Sat Mar 24, 2012
Florida is a deficiency judgement state so if your wife doesn't work with the lender and do a Deed In Lieu, Short Sale, Principal Reduction (and keep it), or a Deed for Lease and doesn't get forgiven the lender's loss "in writing" then they can file a judgement and collect and even attach wages, sell assets, etc. if the lender forecloses! It's crucial that your wife and/or her brother do something quickly. Also an attorney is the right person to consult to verify the wording of your final short sale (or Deed In Lieu) approval letter clearly states she will be forgiven the loss.

Hope this helps.

All the best,
Alma Kee
http://www.SoldOnTampa.com
0 votes Thank Flag Link Tue Apr 3, 2012
As others have suggested, your wife should speak with a Realtor® about doing a short sale. Her credit will recover much more quickly that way -vs- foreclosure. Your credit should not be affected if you are not on the mortgage which is how it sounds from what you posted.
0 votes Thank Flag Link Tue Apr 3, 2012
It is unclear from your question if your wife purchased the house prior or during your marriage.
Also, every state in the U.S. has separate rules as to personal property and marital property. If this property was purchased prior to your marriage, your wife and her brother are ultimately responsible, however, if it was purchased during your marriage, in most states, it would be considered a joint marital asset, therefore affecting you as well. Good luck in your research an future investments. Maria Naclerio, Community Sales and Rentals, Long Island, NY 516-635-1667
0 votes Thank Flag Link Sun Mar 25, 2012
It is unclear from your question if your wife purchased the house prior or during your marriage.
Also, every state in the U.S. has separate rules as to personal property and marital property. If this property was purchased prior to your marriage, your wife and her brother are ultimately responsible, however, if it was purchased during your marriage, in most states, it would be considered a joint marital asset, therefore affecting you as well. Good luck in your research an future investments. Maria Naclerio, Community Sales and Rentals, Long Island, NY 516-635-1667
0 votes Thank Flag Link Sun Mar 25, 2012
Due your questions are more specific and more complicate involves also inmigrations process, I suggest to you find a Lawyer, we like to help community, but you need a LAWYER.
0 votes Thank Flag Link Sun Mar 25, 2012
The best solution from the real estate and credit history point of view, is to do a short sale with the waiver of deficiency. You'll need a realtor with CDPE (Certified Distressed Property Expert) professional designation. The chance of your being able to get this done is really good, because this was a principal residence for your wife's brother. In about 3 years, your wife's credit history will be good again (with other steps to improve it - please read up on credit building or re-building).
However, your wife needs to fill out everything for the short sale in her name only, and, not to have any taxable income after the short sale completion (coming from the difference between what the house will sell for and the loan amount). Her protection will be in "insolvency exemption" - because part of the short sale approval is borrowers' hardship (being broke). This should be discussed in advance with a CPA.

Deed in Lieu (DIL) - is worse than the short sale (although it does let the owners of the property off the hook), but it only works when there is only one mortgage on the property. DIL could have hidden pitfalls, so it should be checked by an experienced attorney (familiar with the potential problems).

Your personal credit history should not be involved as long as you and your wife don't have any joint credit cards. In a few years, this will not an issue (after your wife's credit history restores). You can also have separate bank accounts for now (until your wife's credit improves) as your wife's banking rating could effect yours negatively.

There is also an option of refinancing with the new HARP program (your wife may want to call her lender and find out if this is possible). There is a chance that she could refinance out of the house also, and her brother would receive a principal and rate reduction (if qualified).

Would love help you solve these issues,

Irina Karan, CDPE
Beachfront Realty, Inc.
IrinaKaran@gmail.com 305-904-2355
0 votes Thank Flag Link Sun Mar 25, 2012
You may want to do a Deed In Lieu or Short Sale because it may be difficult to get a lender to release your wife from her obligation on the mortgage. There is also the Deed for Lease so maybe her brother can rent the same house.

All the best,
Alma
0 votes Thank Flag Link Sun Mar 25, 2012
Please contact an attorney, real estate professionals are not licensed to practice law.
0 votes Thank Flag Link Sun Mar 25, 2012
Hi, my best advise is to see an Attorney, since there are many options...

1) Pre-foreclosure Short Sale (may get forgiven the loss and also get $3k cash or up to $35k at closing)
2) Deed in Lieu of Foreclosure with $3k cash incentive --just make sure they are forgiven any loss
3) Deed for Lease - again make sure loss is forgiven "in writing"
4) Principal Reduction Alternative - Balance owed will be reduced


1) Pre-foreclosure Short Sale (may get forgiven the loss and also get $3k cash or up to $35k at closing)
2) Deed in Lieu of Foreclosure with $3k cash incentive --just make sure they are forgiven any loss
3) Deed for Lease - again make sure loss is forgiven "in writing"
4) Principal Reduction Alternative - Balance owed will be reduced

They may be better off keeping it and getting a principal reduction and then rent it out if they do not want to live there. have an attorney who do short sale and can provided you with the legal advise you required for this type of situation.

please give a call for a free consultation, and more details.

All the Best,

Susi Campos/305.710.4076
0 votes Thank Flag Link Sun Mar 25, 2012
There are several programs that your wife and her brother may qualify for:

1) Pre-foreclosure Short Sale (may get forgiven the loss and also get $3k cash or up to $35k at closing)
2) Deed in Lieu of Foreclosure with $3k cash incentive --just make sure they are forgiven any loss
3) Deed for Lease - again make sure loss is forgiven "in writing"
4) Principal Reduction Alternative - Balance owed will be reduced

Many Realtors are knowledgeable about the Short Sale process but if this is not her or her brother's primary residence there are may also be IRS Federal Income Taxes owed on the amount forgiven and reported by a form 1099. They may be better off keeping it and getting a principal reduction and then rent it out if they do not want to live there.

You wife and her brother truly need legal advice. It would be worth spending a some money to get reliable legal advice to protect your wife.

All the best,
Alma Kee
http://www.SoldOnTampa.com
0 votes Thank Flag Link Sun Mar 25, 2012
Zee,

Your wife and Her brother are on time to save their credit and avoid foreclosure.

They can do a short sale and if the shirt sale is complete before the end of the year they can qualify for tax relief act.

I have an attorney who do short sale and can provided you with the legal advise you required for this type of situation.

please give a call for a free consultation
Carlos Escamilla
305-300-8814
realty world executive homes.
0 votes Thank Flag Link Sun Mar 25, 2012
Mr. she has many options to handling this situation like SHORT SALE, You aren't at the Note and Mortgage, but you have something legally call married even those her Lender is going to place a Complaint send a summon to you because their searches shows that she is married. This process is a regular process Please call me to explain 305 519-3199
I'm not a lawyer, but some important information you may be needed.
0 votes Thank Flag Link Sat Mar 24, 2012
Advise your wife and/or brother-in-law to IMMEDIATELY contact the lender to see if they can keep the house and lower the principal balance owed. With the recent settlement because of fraudulent foreclosure filings many of the banks are now using the money to reduce the principal balance on the mortgage.

Otherwise if your wife and her brother-in-law do nothing and it is foreclosed, the lender may be able to get a judgement and may be able to attach her and her brother's wages and attach bank accounts, etc.

They can go here: http://www.MakingHomeAffordable.com for info

All the best,
Alma Kee
http://www.SoldOnTampa.com
0 votes Thank Flag Link Sat Mar 24, 2012
Zee!

You may want to pull your credit and see if the late payments show up.

It appears as though this should not be on your credit but it's worth a credit check up.
0 votes Thank Flag Link Sat Mar 24, 2012
Because you are not in the mortgage, it will not affect your credit, but you can't buy any other house with your wife , because your wife credit will be affect.
0 votes Thank Flag Link Sat Mar 24, 2012
If you were never on the note, you should not be affected. Your wife's crdit will be adversely affected by a foreclosure for quite some time. She and her brother should investigate the possibility of a short sale, which would be less damaging, or simply take over the payments, reinstate the mortgage, and rent the house out until it is a good time to sell
0 votes Thank Flag Link Sat Mar 24, 2012
If you are not involved in the transaction it will. Not affect your credit.
0 votes Thank Flag Link Sat Mar 24, 2012
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