It never rains but it pours, is an old saying which is true for many going thru or just thru a divorce at the current timing.
Stress in life situations are rated by a scale of how likely you are of coming down with an illness, when you have a high total stress score happening in your life.
Highest on the stress score chart, is loosing a long term relationship, whether by death, divorce or otherwise. Very high on the scale, of adding stress points are loss of job and next, loss of long term location.
Loss of income for whatever reason is, of course, a major stressor.
Right now many are having all of these happen at the same time.
We write this to alert you to the odds of the combined stress causing you to come down with a major illness within the next 12 months, which is a greater hazard then all these seemingly stressful events happening to you right now. See our article: How Stress Can Kill You?
This article is about understanding more about the HOME foreclosure process
and what divorce has to do with it, how it proceeds and how you can work with it, in your divorce process.
If your home is in a community property state (divide everything 50 - 50 state)
and your home is paid for or nearly paid, for you can sell it an split the proceeds, or have it appraised and one buy out the others half.
Who got the house used to be the prize winner in the divorce. Usually the person with custody was awarded the house to maintan a continuation of normal for the children.
Now who gets the house may be the one that is stuck with the liability, of underwater if the home goes to foreclosure, and is forcibly sold.
In Arizona, California and five other states, giving the house back ends your liability.
However, in the remaining states it does not since they do not have anti deficiency laws, and you can be held liable (filed suit) for the shortage. However, unless you have considerable income or assets does not seem to be happening but is a hazard.
If it works out you can make a little less payment and if any current arrears are forgiven or attached on the end (called forbearance agreement) and it is almost even equity position, then you may want to get a loan mitigation agreement in the works. Most you will have to be behind and threatening to walk to get their attention.
However, if the home is now worth less then the mortgage or less then would be derived from the sale, then does it make sense to stay in the home unless you can negotiate with the lender some very favorable terms in the form of a loan modification to lower interest, longer payment period, less principal even, etc.
If such is not worked out (they may pretend to do this to try to get you to continue payments full rate, meantime). If they are working on it or not, then you sit tight for six months to a year with no payments
and get your finances back together, while the lender goes thru the steps they have to do to foreclose.
This normally takes six months to a year but overwhelmed many have taken well over a year.
Now you think you may be cheating the bank in not getting out, actually you are doing the bank a favor, an empty house depreciates the neighborhood, vandalism is common, the lawn and yard have to be maintained, etc., and the fact you are in the home helps, not hurts.
The lenders collectors (often calling from India) will use the threats of "throwing you out on the street" ploys to get you to send in one more payment. Their ability to coerce money from a past due account is their career. They will make threats, promise anything you want to hear, etc.
Best end it statement is, "I have submitted for a loan mitigation and talking no payments until something is worked out."
They will also use the "ruin your credit" ploy, which is happening anyway, and if you make your home payments you are likely to be unable to make your other timely payments and there goes your credit anyway.
The lender has an expensive process to go thru and may even pay you to get out early, etc., and turn in the keys to the tune of several thousand dollars since it will save them legal costs of foreclosure.
Also, they may agree to have you live in it and do a short sale while living there, which means, list it for sale and if get an offer, no matter how low, if they accept it you have 30 days to leave and they settle the agreement by signing your debt settled in full.
Or since the market is dead right now, they may, when get down to the end agree to rent it to you for half the market rental rate, to keep it occupied and some income coming in.
Ignore all the collection department threats, and promises if you will just pay, they have NO AUTHORITY to make any deal with you.
Deal ONLY with the loan mitigation department.
Be sure and do not fall for all the traps of people offering to make your payment and save your house for you. Refuse all payments for advise on how to settle this
(timely legal advice okay). You can get free counseling by many government level offices. (ask the collectors calling for nearest one.)
There are many state and county and charitable counseling offices but here is one Federal one....they will advise of any government assistance also. Go here
We have put together a site on the advisablity of just "walking away" from an underwater home or past due home at
http://homeloanwalkaway.com
or if you are a person that put your life savings in homes to rent, go here
http://investorwalkaway.com
We also sponsor talk it our forums on the subject linked there and remember, to talk about divorce issues and becoming suddenly single we have a Singles Talk Shop at
http://singlestalkshop.com
