monk, Home Owner in Port Saint John, FL

my home is in foreclosure what are my options on keeping my home if iam divorced

Asked by monk, Port Saint John, FL Thu Dec 29, 2011

Help the community by answering this question:


First, you need to remove the other party from title, and release the other party from your mortgage. You would only WANT to do this, if you are 110% certain that A. You can keep the home long term, and it is not upside down right now, meaning you owe more on the property than it is worth. I see hundreds of clients who do not understand that if you are upside down, it could take years to get back to even, and in effect those payments are like rent. Thrown out the window. Really consider your financial situation before trying to save a home, which may not be savable. You have been warned :)

Call your lender and ask to apply for a loan modification, or a forebearance. They will tell you what you qualify for. They will routinely lose your paperwork, so realize that this is going to be a frustrating process, but hang in there.

If you qualify for a loan modification, you are good to go. Make your payments and breathe a sigh of relief. If the bank offers you a trial modification, you need to get it in WRITING, that if you make 6 payments on time, the new rates will be XYZ> If you do not, you will be surprised when you get DENIED for a loan modification.

A short sale may be an option, and the pros and cons have been expounded on below.

Daniel Klein
Over 1 Billion Sold
1 vote Thank Flag Link Thu Jan 5, 2012
Hi Monk,

If after analyzing your total financial situation and weighing out your options, you may actually be able to get the lender on your mortgage to remove your ex wife and grant you a modification on the mortgage to lower it to 31% of your monthly gross income. Your "principal amount owed on the mortgage will probably be the same so if let's say you owe $200k and the most you could sell it for in today's market is $100k, and you can demonstrate a hardship, it may be wisest to do a Short Sale and then rent for two years.

Otherwise if you're only underwater with your mortgage a smaller amount, then you may want to keep the home and try to get your ex wife off the mortgage.

Before you talk to your lender, you may want to contact an attorney and a CPA to find out what your tax consequences may be as well.

Good luck!

All the best,
0 votes Thank Flag Link Fri Jan 6, 2012
Some okay advise here if you were not divorced.

Loan modifications are only made for the parties on the mortgage therefore your ex would need to be a party of the modification, elimination could only take place in a refinance and if you are in foreclosure qualifying for a refinance will not be an option.

Short sales require cooperation from all parties involved is your ex willing to cooperate knowing they are going to take a on their credit record because a short sale does affect ones creditability and keeps them from obtaining another mortgage for 3 years (yes less intrusive than foreclosure and better start selling that to your ex).

We find the best negotiations, when a divorce is involved, happen with deed-in-lieu-of foreclosure and many times if the bank does not take a major hit you can negotiate the elimination of the mortgage history from your credit.

Good Luck,
Bob Patrick
Buy a home after foreclosure, short sale, deed-in-lieu-of or bankruptcy expert
Movin-On LLC
Helping families/people that have or will loss their homes get back into another in as little as 6 months
0 votes Thank Flag Link Thu Jan 5, 2012
Hi Monk,

Most important thing to remember is to stay in the home until told to leave.

Once you leave the home your liability increases and your options decrease.

In some cases owners can stay in the home for a minimal payment to the lender.

In this case the lender does not have to maintain the home.

Best wishes to you in the new year!
0 votes Thank Flag Link Fri Dec 30, 2011

Short sales are just about seems like you can't get away from them. Many sellers, loan officers and Realtors say they know a lot about short sales, but don't know how the short sale process works or even why a short sale is a better alternative to a foreclosure.

A short sale will enable the seller to purchase a home about 2 years after a short sale completion while a foreclosure will make you wait 5 years. In addition, short sales are better for the lender and it will keep the house occupied, with water and electricity still on and also keep the lawn mowed. Plus the bank will lose less money through a short sale.

No Foreclosure - foreclosures can be a hard and stressful process for a family.

Being Proactive - facing a foreclosure head on will help give you some control over the process.

Start Newer, Faster - minimizing damage to your credit can help you and your family get back on your feet faster.

May not owe anything after the short sale - you can try asking the bank to cancel your debt altogether. It does happen, but not all the time. Primary residences are usually treated more favorably by the lenders.

There is still damage to your credit - when a short sale is done, it is still documented on your credit but won't have the same impact as a foreclosure for most creditors.

Tax Consequences - there may be tax consequences if the bank forgives the debit and will issue a 1099 to the IRS for the amount of debt forgiven.

Bank could demand payment for their loss - the bank doesn't have to forgive the debt. They are able to ask you to pay them back for the difference on the sale and what is owed, but you will need to agree to this.

There are no guarantees in a short sale - whether the bank will approve the sale or forgive your debt, but short sales offer a better alternative to minimize the downside of facing a foreclosure.

Disclaimer -There can be legal and tax consequences. You may want to consult with an attorney or tax specialist before attempting a short sale. A real estate agent cannot give you legal or tax advice.
DO YOU QUALIFY? - Can you answer Yes to all 4 Questions?

1. The Homes' Market Value Has Dropped. Hard comparable sales must substantiate that the home is worth less than the unpaid balance.

2. The mortgage is in or near default status.

3. The seller has fallen on hard times. The seller must submit a letter of hardship that explains why the seller cannot pay the difference due upon sale, including why the seller has or will stop making the payments.

4. The seller has no assets. The lender will want to see a financial statement and recent tax returns.


1. The lender will want to see your entire financial picture.

2. The bank may want you to sign a promissory note for the deficiency between the amount owed and the amount your home is sold for.

3. As the seller, you cannot receive any proceeds from the sale. None. Period. Your Realtor and title company may have to work for reduced fees.

4. The banks are overwhelmed with short sales and many times a decision can take up to 60 days or longer.

5. The property may be foreclosed on during the short sale process. Be sure to use an experienced short sale company who should be able to get the foreclosure postponed.

6. Do not expect to receive information on a regular basis, as there may be weeks that go by without news from your lender.

7. The bank will want to get a BPO (Broker Price Opinion) and/or an appraisal of your house.

8. Be patient. This is the best policy. Try to avoid being stressed out over something that you are not able to control.
0 votes Thank Flag Link Thu Dec 29, 2011
Oh.. but if your former spouse is on the mortgage, her attorney may require the house to be sold to relieve her of liability on the mortgage.

You may have no option other than doing a Short Sale if it is underwater and you and your former spouse do not have the money to bring to closing.

You may be able to try to get the mortgage only in your name (removing your wife) but it may be difficult or impossible.
0 votes Thank Flag Link Thu Dec 29, 2011
Hi Monk,

Go here:

You may be able to get a loan modification to lower your monthly housing payment (mortgage, insurance, HOA fees) to 31% of your income.

Contact the company you are making your mortgage payment to (they probably do NOT actually own your mortgage by the way) and ask them for a modification to your mortgage.

If they cannot give you a loan modification (your income is too low to allow you to stay in the house) you may be able to do a Short Sale, Deed In Lieu of Foreclosure or even a Deed for Lease that may allow you to lease the house.

Hope this helps.

All the best,
0 votes Thank Flag Link Thu Dec 29, 2011
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