Hypothetical Real Estate Law Questions

[Smackie Chan]

Jack was married to Diane. Diane has shitty credit. The couple bought a house >25 years ago, but it's in Jack's name only due to Diane's crappy credit rating. The couple stayed married for over 20 years, and Jack made the mortgage payments out of his income on time every month. The couple then got divorced, and as part of the settlement, Diane gets to remain in the house with the stipulation that she is now responsible to make the mortgage payments, although the loan and the deed are still in Jack's name. Diane can't get the house refinanced or the loan transferred to her name because her credit still sucks. Jack will not sign a quit claim until Diane can get the house refinanced in her name, although the divorce agreement stipulates that he must sign the quit claim with no strings attached. Diane doesn't force the issue because she's fine with the house being in Jack's name as long as she gets to remain living there.

Another stipulation is that if three consecutive mortgage payments are missed, Jack can compel the house to be sold, with whatever proceeds that result from the sale going to Diane. Diane is late every month making the mortgage payments, which hurts Jack's credit rating because the loan is still in his name. She never misses three consecutive payments, so she gets to remain in the house without being compelled to sell it. Jack doesn't want to sign the quit claim because he believes if Diane dies, "ownership" of the house will revert back to him. Jack & Diane have been divorced for about 4 years now, with all mortgage payments, late though they may have been, having been paid by Diane. The value of the home is roughly 4 times the amount of the outstanding loan balance.

Legal questions:
1. Is Jack correct in his belief that ownership of the house will revert to him if he doesn't sign the quit claim, Diane precedes him in death, and he once again starts making the mortgage payments?
2. Is there anything Jack can do in the current scenario to avoid having his credit negatively affected by Diane's late mortgage payments?
3. Is there a legal course of action that can be taken to get Jack's name off the loan and/or have the loan refinanced, despite Diane's bad credit, given that Diane has made the mortgage payments for over 4 years, and that her payment delinquency results in Jack taking hits to his credit scores?
4. Can Diane legally leave the house to anyone other than Jack in her will as part of her estate with the deed and the loan in Jack's name?

Again, this is purely hypothetical.

[R-Jack]

Both my name and my ex's names were on the deed, but mine alone on the mortgage, for the same reasons as your hypotheticals.

I stayed in the house after the split. My ability to pay the mortgage being the biggest factor, in addition to the myriad of other reasons in my favor. She couldn't afford it and I didn't want to live there long term so we knew we were going to sell it from the get go. Thankfully your hypothetical scenario didn't apply.

Watching over $100K get dumped into her bank account after splitting the sale did suck, but I imagine it's better than watching your credit go down the toilet while waiting for the bitch to die.

[Screw_Michigan]

Boy, marriage sounds awesome. Where do I sign up?

Hypothetical: Why would one marry someone with shitty credit?

[R-Jack]

Hypothetical: Why would one marry someone with shitty credit?

It beats spending Thursdays in November watching Turner & Hooch

[Screw_Michigan]

Sounds like this dude should have forced a sale of the home when he got divorced.

[Y2K]

Sounds like this dude should have forced a sale of the home when he got divorced.

4 or 5 years ago the market was complete shit.

[Screw_Michigan]

Well, how is he in any better of a situation?

[Y2K]

Since it's hypothetical...
Once he pays a hit man to knock off the ex he'll score some bank on the house and get his credit straightened out.

If
He does it right and doesn't get thrown in jail for Murder.

[Diego in Seattle]

Send 88 to check on her...

[Moving Sale]

One question first, how under or over water is the house seeing as the mortgage has been paid for almost 25yrs?

[Wolfman]

Guess they weren't doing so well after all?

[R-Jack]

Well, how is he in any better of a situation?

For example....

When I separated in 2012, the housing market was in the toilet in my area. I could've sold at the lowest point, or stayed in a house where my mortgage was far better than the rental market. Like $1000 a month better. 18 months later, the house sold for $100K more than its Sept 2012 estimate.

So by sitting on it and not paying a higher rent, it was a net gain of $68K for me. To put it in terms you can grasp.....that's 22,667 loads of laundry in your basement.

[Screw_Michigan]

Thanks for explaining it in terms I can understand.

That's a pretty quick (and large) swing the price of your house made. What do you attribute that to?

[mvscal]

Jack has a shit lawyer.

the divorce agreement stipulates that he must sign the quit claim with no strings attached.

How the fuck does that happen if both mortgage and the deed are in his name?

1. Yes. He still owns the house. Diane might as well be his pet cat.
2. No
3. Yes, he can sign the quit claim.
4. No

The value of the home is roughly 4 times the amount of the outstanding loan balance.

Of course, once he signs the quit claim, she can sell the house and cash in on the equity. He's just fucked either way. He's an idiot with a shit lawyer and made a bad deal. He might as well sign the quit claim and cut his losses. She can just lay back and torpedo his credit for the rest of his life if she wants to.

[R-Jack]

Thanks for explaining it in terms I can understand.

That's a pretty quick (and large) swing the price of your house made. What do you attribute that to?

An even more aggressive decline starting 2008. Plus a shithole like Rodeo takes longer to correct.

[Smackie Chan]

Jack has a shit lawyer.

Let's assume that much is true as we continue to introduce more hypotheticals into the scenario. While no F. Lee Bailey, the competence of the attorney was trumped somewhat by the decisions Jack made against the advice of counsel. Among the reasons Jack not only agreed to the proposed terms of the divorce, but suggested them, was that by walking away from the house rather than simply selling it, which he could easily have done and pocketed a tidy sum, he was allowing his beloved soon-to-be-college-freshman child an opportunity to remain in the home rather than be kicked to the street. Other housing options for the child were certainly available, but Jack is a softie and wanted the child to be happy and not have to move.

Since we're able to introduce any facts and plot twists we want to this tale, another factor, and perhaps a larger one, was that by essentially giving the house to his no-good ex-wife, Jack was able to avoid, by way of mutual agreement, paying a fuckton of alimony to Diane, who agreed to no alimony payments if allowed to remain in the home and assume responsibility for the payments. Time was also a factor, as was the desire to minimize the contentiousness of the proceedings and the animosity between the two parties. Jack had a sweet job opportunity in another part of the country that he wanted to take, and being tied up in divorce proceedings could have jeopardized that.

None of the facts here impact the answers to the legal questions asked. But as Jack's "creator," I just wanted him to be seen in a more sympathetic light rather than perceived as a complete dumbfuck. And just to clear up what I'm guessing is already running through y'all's domes, I am not Jack. My divorce was final in 1989, there was no house involved in my divorce settlement, my children were in grade school at the time, and I paid alimony (though not much, and only for a year). And my credit is excellent. Jack is simply my imaginary friend who has a few issues, and the mere fact that I have an imaginary friend also points to a few issues of my own. I'll own that much.

[Screw_Michigan]

Is this in California?

[trev]

It's cheaper to keep her.

[Screw_Michigan]

It's cheaper to keep her.

[mvscal]

I do not think so. If the divorce decree required him to deed the house to Diane, then the house should have been part of her estate at her death. Her executor could probably go to court and obtain an order requiring him to comply with the previous order. The fact that he didn't do what he was obligated to do should not make any difference.

This is a weird deal across the board. Quit claims are usually for jointly held property. It appears that the objective was to provide as much continuity and stability as possible under the circumstances for the sake of the child. That's totally understandable. Unfortunately, if he quits his claim and reassigns the mortgage she will likely lose the house to foreclosure since she seems to be struggling to make the payments. I'm guessing that's why neither side is willing to take any action to enforce the order.

He might as well have just leased the house to her and collected rent.

Why not? If American Honda loans me money to buy a Honda, and I decide to leave it to cousin IT, what can American Honda do about it (aside from enforcing the terms of its now with the now deceased me)?

Except that the bank didn't loan her any money nor is she on the deed. She has no title to the property.

[Screw_Michigan]

LEARN from this, Screwy. You're looking awfully naive in this thread.

Sorry, idiot. I don't need to put my hand in the fire to know I'll get burned.

[Moving Sale]

The value of the home is roughly 4 times the amount of the outstanding loan balance.

One question first, how under or over water is the house seeing as the mortgage has been paid for almost 25yrs?

Read much?

Sometimes, not enough on this one it appears.

[Screw_Michigan]

:?