Second mortgage questions

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Second mortgage questions

Unread postby thatguy » Mon Jul 23, 2012 2:52 pm

Hi all. I am in the very infantile stages of separation. My wife and I have pretty much agreed on everything except one big one; the second mortgage.

We have approximately $46k on a second mortgage. We owe $69k on the house. We have agreed that I will remain in the house.

That second mortgage was used to pay off things such as cars, credit card debt, etc, that was both of ours. Stupid mistakes made in our 20s basically. Because the second mortgage is tied to the house, my wife is saying that i am solely responsible for that entire second mortgage. Is this true?

She has also stated that, if she is responsible for 50% of that second mortgage, that she thinks we should calculate the equity in the home with only the first mortgage. Approximate value is $120k - $69k = $51k in equity. She would be entitled to $25.5k, so that whole $23k portion of the second mortgage would fall right back into my lap again.

My thinking was this:
Value of house at $120k, minus $115k owed on the house = $5k in equity. I would take an additional $2.5k of the second mortgage (her half of the equity), making her responsible for $20,500.

This second mortgage is a huge stumbling block for me. If she is not financially responsible for a large portion of it, then I fear I will not be able to refinance the house and will have to sell it. Since she is considering places outside of our kids school district, this forces me to find a place within the district if I want the kids to remain at their current schools (which I desperately do).

Thanks for any help and/or insight you can provide! It is greatly appreciated!
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Re: Second mortgage questions

Unread postby Trevor » Mon Jul 23, 2012 3:25 pm

You say everything is settled but the second mortgage, yet in the same post you mention she is looking to relocate to a different school district, which tells me there is a much bigger problem that remains unsettled...whether she gets to rip up the kids' roots and move away from their lifelong home. Open your eyes. The second mortgage is small potatoes in comparison.

Have you placed all the assets and liabilities on a spreadsheet to illustrate the imbalance she's proposing? To propose more equitable distribution of assets and liabilities?

Is she on both the mortgage and the second? Who is or is not responsible lies exclusively in the realm of the signature pages of those loan instruments. And equity is calculated properly minus all impediments to a clear title, which includes all loans, liens, and other claims that may exist. Your STBX seems fairly ignorant of the real estate divorce issues.

What's the custody agreement, kids stay in the house with you?
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Re: Second mortgage questions

Unread postby thatguy » Mon Jul 23, 2012 3:33 pm

Trevor wrote:You say everything is settled but the second mortgage, yet in the same post you mention she is looking to relocate to a different school district, which tells me there is a much bigger problem that remains unsettled...whether she gets to rip up the kids' roots and move away from their lifelong home. Open your eyes. The second mortgage is small potatoes in comparison.

Have you placed all the assets and liabilities on a spreadsheet to illustrate the imbalance she's proposing? To propose more equitable distribution of assets and liabilities?

Is she on both the mortgage and the second? Who is or is not responsible lies exclusively in the realm of the signature pages of those loan instruments. And equity is calculated properly minus all impediments to a clear title, which includes all loans, liens, and other claims that may exist. Your STBX seems fairly ignorant of the real estate divorce issues.

What's the custody agreement, kids stay in the house with you?

Well, she isn't wanting to move the kids from their school district. Its just that the places she is looking at are near her family in a neighboring city. The kids would still be listed with their primary residence as with me so that they would remain in their schools. We will be doing 50/50 custody, rotating on Monday mornings.

I have done a quick and dirty spreadsheet, but definitely need to do a more polished one.

Her name is on both the 1st and 2nd mortgage.
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Re: Second mortgage questions

Unread postby Trevor » Mon Jul 23, 2012 3:55 pm

thatguy wrote:Well, she isn't wanting to move the kids from their school district. Its just that the places she is looking at are near her family in a neighboring city.

That's like saying you don't want to get fat, but the only choices for meals are fast food joints. Wake up, bro. Stop drinking her kool aid. She does want to move the kids away. She doesn't care that they may have to drive an hour to school every morning they're with her. That'll get old fast, especially for the kids. And I bet she enrolls them in a school in the other town in the fall.
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Re: Second mortgage questions

Unread postby thatguy » Mon Jul 23, 2012 4:28 pm

Trevor wrote:
thatguy wrote:Well, she isn't wanting to move the kids from their school district. Its just that the places she is looking at are near her family in a neighboring city.

That's like saying you don't want to get fat, but the only choices for meals are fast food joints. Wake up, bro. Stop drinking her kool aid. She does want to move the kids away. She doesn't care that they may have to drive an hour to school every morning they're wit her. That'll get old fast, especially for the kids. And I bet she enrolls them in a school in the her town in the fall.

Trevor, when I say the next city over, I'm talking less than 6 miles from my current residence. The kids will be less than 5 miles from their respective schools. My STBX would have no problem signing something that stated that the kids would remain in their current schools. That truly isn't a concern of mine.

My main thing is trying to figure out what the deal is about this second mortgage.
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Re: Second mortgage questions

Unread postby BubbaGumpShrimp » Mon Jul 23, 2012 4:39 pm

Is her name on both mortgages? If so then you'd have to take both into account when determining equity. She can't claim that she's due half the equity from the first mortgage, but is not responsible for the second mortgage.

My NJ was even more ridiculous. She told me that I had to buy her out of my house (only my name on the house...and a premarital asset). :lol:
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Re: Second mortgage questions

Unread postby thatguy » Mon Jul 23, 2012 4:55 pm

BubbaGumpShrimp wrote:Is her name on both mortgages? If so then you'd have to take both into account when determining equity. She can't claim that she's due half the equity from the first mortgage, but is not responsible for the second mortgage.

My NJ was even more ridiculous. She told me that I had to buy her out of my house (only my name on the house...and a premarital asset). :lol:

Thanks. That was my thinking as well.

But, is she responsible for 50% of that second mortgage? Or is she correct in saying that I am solely responsible for it since I am getting the house?
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Re: Second mortgage questions

Unread postby Trevor » Mon Jul 23, 2012 5:02 pm

Trevor wrote:Is she on both the mortgage and the second? Who is or is not responsible lies exclusively in the realm of the signature pages of those loan instruments.

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Re: Second mortgage questions

Unread postby Southern.Putter » Mon Jul 23, 2012 5:03 pm

thatguy wrote:But, is she responsible for 50% of that second mortgage? Or is she correct in saying that I am solely responsible for it since I am getting the house?

Two important questions need to be answered in order to address your question.

1. Did she sign for the second mortgage at the bank?

Or

2. Were the proceeds of the loan used to fund marital expenses?

If the answer to #1 is "yes", then she's on the hook. Period. If not, move on to #2, which you've already answered with a "yes". While #1 is a slam-dunk in court (yes, she is responsible) #2 will require you to provide some evidence as to the use of those funds in order to establish her liability.

Note that in both cases, I'm talking about her "liability" in the family court judge's eyes. I'm not talking about it from the point of view of your banker, which is entirely different. Bankers look solely at the question of "who signed for the loan?" and that's it. Also, the banker could care less what the judge decides during the apportionment of your marital estate. This board is full of tales of woe from guys who saw the judge assign the responsibility for making a particular loan payment to their Ex-wife, only to find that (surprise, surprise) she quit making the payments and the bank then came after the husband. Why? Because he, too, had signed the note.

So, back to #1: did she sign or not?
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Re: Second mortgage questions

Unread postby thatguy » Mon Jul 23, 2012 6:06 pm

Southern.Putter wrote:
thatguy wrote:But, is she responsible for 50% of that second mortgage? Or is she correct in saying that I am solely responsible for it since I am getting the house?

Two important questions need to be answered in order to address your question.

1. Did she sign for the second mortgage at the bank?

Or

2. Were the proceeds of the loan used to fund marital expenses?

If the answer to #1 is "yes", then she's on the hook. Period. If not, move on to #2, which you've already answered with a "yes". While #1 is a slam-dunk in court (yes, she is responsible) #2 will require you to provide some evidence as to the use of those funds in order to establish her liability.

Note that in both cases, I'm talking about her "liability" in the family court judge's eyes. I'm not talking about it from the point of view of your banker, which is entirely different. Bankers look solely at the question of "who signed for the loan?" and that's it. Also, the banker could care less what the judge decides during the apportionment of your marital estate. This board is full of tales of woe from guys who saw the judge assign the responsibility for making a particular loan payment to their Ex-wife, only to find that (surprise, surprise) she quit making the payments and the bank then came after the husband. Why? Because he, too, had signed the note.

So, back to #1: did she sign or not?

Yes, she signed. Looking at a bill right now that is addressed to both of us.
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