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Caddis
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Personal Loan used for home
      #650131 - 04/07/10 11:25 PM

Going through a divorce in AZ and have a question regarding a personal loan from mother in law which was used to purchase a house in 06. We are paying the loan back into his families trust fund. My husband and I are the only ones listed on the deed. The personal loan isn't tied to the house by a deed of trust, etc.

Husband wants to stay in the house. The property value has declined somewhere in the neighborhood of 100k since we purchased it in 2006. (This is a guess as we haven't had an appraisal on the home). Husband feels that I am responsible for 1/2 of the loss in value on the home and refused to sign divorce papers. This is the only thing holding the divorce up, no other problems in division of property, debt, etc.

This seems absurd to me and also to the attorneys I consulted with. I am currently represented and we have had one mediation and another is scheduled for June. I have offered 10k repeatedly but husband won't budge.

I wanted to get some thoughts on this. Is it likely a judge would allow my husband to stay in the home and require me to pay him 50K for the decline in the market value? Or would it be more likely that the judge orders the house sold and splits the debt? Also, since I am on the title I'm assuming if the house were ordered sold, I'd get to approve the buyer? (He has threatened that he would just buy the house back and continue paying back into the family trust).


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johnsmithy
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Re: Personal Loan used for home [Re: Caddis]
      #650252 - 04/08/10 09:08 AM

Seems pretty absurd to me, I am soft of in a similar situation with out the (whatever he is trying to pull)

My stbxw and I bought a home right before things crashed. I don't want to sell it because we would take a lose, can't refinance because the loan is more then the value of the house so we are just going to take her off the loan and deed

Everyone lost money on the housing market I don't see how he can hold you accountable or liable for that.

I don't know about the law regarding the situation but he seems out in left field to me.


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d2njti
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Re: Personal Loan used for home [Re: johnsmithy]
      #650287 - 04/08/10 09:50 AM

Seems to make total sense to me. If the house had gained $100K during that time, wouldn't you expect to receive half of that in the settlement? If you sold the house and split the profit/loss wouldn't that be split equally? If you sell the house at a $100K loss, that $100K will come from somewhere - split 50/50, short sale to the bank.

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johnsmithy
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Re: Personal Loan used for home [Re: d2njti]
      #650335 - 04/08/10 12:18 PM

maybe I am miss reading it here but seems to me like he doesn't want to sell, just wants half the lose back, obviously if they sell it you still have to split the dept

maybe I am just really tired and can't read today


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d2njti
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Re: Personal Loan used for home [Re: johnsmithy]
      #650463 - 04/08/10 06:59 PM

Ok. So you're suggesting that if they sell the house they will lose $50K each, and if there were a $100K gain and he kept the house, then he would have to compensate her half the gain, but since there's a $100K loss and he keeps the house, she is not responsible for half of the loss? That seems wrong to me. The gain or loss was acquired during the marriage, then the gain or loss is a marrital asset/debt. It would be the same if they had a brokerage account that gained or lost value during the marriage.

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Caddis
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Re: Personal Loan used for home [Re: d2njti]
      #650541 - 04/08/10 11:03 PM

Your view makes sense d2njti. What happens if I pay 50k and in 10 years the house has 100k equity in it? I suppose I don't get any of that equity because we wouldn't be married during the time that the increase in value occurs. So in the end I'd be paying 50k to help my ex husband afford the home without seeing any return on investment.

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Sherron
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Re: Personal Loan used for home [Re: Caddis]
      #650545 - 04/08/10 11:13 PM

"Is it likely a judge would allow my husband to stay in the home and require me to pay him 50K for the decline in the market value? Or would it be more likely that the judge orders the house sold and splits the debt? "

What is the difference for you? If the house is sold and the debt is split, you owe $50k. He wants to remain in the house and is asking for your half of the declined value, or $50k. In both scenarios, you owe $50k. Identical, to you.

The only difference is, in one scenario, your ex to be owes $50k as well, in the other, he has a loss on paper only and may recover that loss over time, and even gain.

So, since the outcome for you will be the same, but not for your ex to be, the real question is, how vengeful do you want to be?


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Caddis
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Re: Personal Loan used for home [Re: Sherron]
      #650573 - 04/09/10 01:34 AM

Vengeance isn't really my concern here. I am concerned with paying 50k for nothing. If my husband wants the house, thats fine with me. He can continue paying the loan.

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BeachBabeRN
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Re: Personal Loan used for home [Re: johnsmithy]
      #650617 - 04/09/10 08:08 AM

Umm.....in order to take someone off a mortgage note, you have to refinance the loan, which you said you couldn't do. Deed is a whole other topic and she CAN quitclaim that so that the title to the house is yours.

I don't know of any other way to get someone off a loan other than refinancing.


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BeachBabeRN
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Re: Personal Loan used for home [Re: BeachBabeRN]
      #650618 - 04/09/10 08:10 AM

Caddis, are you willing to sign away any future profit that the house may turn if he does sell it? If he didn't have to pay you at some point in the future, should he sell the house, perhaps he would just continue making the payments. But to have it in his name only he would have to refinance it.

Sounds like the only way you're going to get out of it.


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Sherron
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Re: Personal Loan used for home [Re: BeachBabeRN]
      #650625 - 04/09/10 08:20 AM

" I am concerned with paying 50k for nothing."
You would be paying $50k for nothing if it was sold, no? It would seem your main concern is that your ex to be may recover his financial loss on the house years down the road, and you'll be out of luck.


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d2njti
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Re: Personal Loan used for home [Re: Sherron]
      #650646 - 04/09/10 09:40 AM

You don't have any right to future increases IF he owns the house and all its obligations. It might lose more value. It might burn down. It might be bought for millions to build a condo project. If he can't refinance, DO NOT SIGN A QUITCLAIM. You might choose to stay on the loan and title in return for say... $60K. There is also the point as Sharron broght up that your $50K loss is real and his is only a paper loss. That might be a good negotiation point. Perhaps your loss should only be a real $30K and his should be a paper $70K.

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Caddis
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Re: Personal Loan used for home [Re: Sherron]
      #650746 - 04/09/10 01:05 PM

Quote:

" I am concerned with paying 50k for nothing."
You would be paying $50k for nothing if it was sold, no? It would seem your main concern is that your ex to be may recover his financial loss on the house years down the road, and you'll be out of luck.




My main concern once again is paying 50k for nothing. If my ex wants the financial gain down the road, then he can take on the entire loan and I'd be fine with that.

If I stayed in the home I'd be willing to assume the remaining debt in it's entirety. I wouldn't expect him to pay me 50k. He knows this. The difference being that he cannot afford the payment on his own.

Arizona is an anti-deficiency state when it comes to home loans. So no, I wouldn't pay 50K if the house were sold.


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Sherron
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Re: Personal Loan used for home [Re: Caddis]
      #650808 - 04/09/10 02:45 PM

"The difference being that he cannot afford the payment on his own."

Then it sounds like the house needs to be sold.


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