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Issues Surrounding Mortgages and Divorce Settlements

Since the marital home is typically a couple's greatest asset, it makes sense that this is a common point of dispute when divorcing in Pasadena. If there is currently a mortgage on the property, this raises several possible financial considerations that must be dealt with.

As long as your name is on the mortgage, you are legally responsible for the debt. This means that even if you move out of the home and your spouse agrees to pay, the bank can come after you if something happens and he or she is unable to make the payments. Even if the court orders just one person to be responsible for the mortgage payments, the bank is still free to come after the other party if the payments are not made. The other party would be able to take the person who should have paid to court in order to attempt to get reimbursement for the expenses, but this is the only recourse that is available. Banks, unfortunately, have little sympathy for divorce-related financial problems.

To get the mortgage in just one person's name, you typically need to have him or her refinance the home. Sometimes, lenders will agree to simply remove one person's name from the papers after a divorce. However, they have no legal obligation to do this.

Since the real estate market continues to be poor in many areas of the country, it's possible that neither one of you wants the house because the loan is upside down and you owe more than what the property is worth. Selling when you're underwater doesn't make sense because you'll end up in the hole. Refinancing isn't an option because you have no equity in the home. In this case, many experts recommend trying to rent the home out as business partners to allow time for equity to build up. Then, you should eventually be able to sell the home.

The issues surrounding mortgages and divorce can be very complicated, so it's important to seek the assistance of an experienced Pasadena divorce lawyer to make sure you obtain a settlement that is in your best interests. If your current mortgage issues aren't resolved appropriately, you could end up with a poor credit rating that would make it hard to get back on your feet after your divorce is finalized.

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