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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Family Law
Satisfied Customers: 29059
Experience:  Attorney with experience in family law.
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I have a great friend with a tuff situation. This man was

Customer Question

I have a great friend with a tuff situation. This man was divorced in January, 2015. At that time, the judge ruled that the spouse was to pay off the mortgage on the house (she is in the house now) within 45 days of the judge signing the settlement agreement.
The spouse did pay off the house, but left the home equity loan outstanding. This was not specifically addressed in the settlement agreement and now the spouse refuses to remove my friend) from the account. My friend said this issue came up after the paperwork
was completed and they were due in court for the hearing. She said she would pay it and he believed her. He knows this was a mistake now to trust she would pay it off. Two attorneys have said he probably cannot get the judge to hear it and doubtful that judge
would rule in his favor. I find this strange because the "mortgage" was addressed in the settlement agreement? A home equity loan is a mortgage. The process would not cost her any money, but a 15 minute trip to the bank. She did not work during the marriage
and continues not to work. Since he has asked her to pay it, she has dropped her payment to almost nothing. This will go on for years. Since this is deductible expense per IRS guidelines seems to me that that rule would make this a mortgage. He is very afraid
how this could affect his credit as this moves forward and she might struggle to pay without a job.. Any thoughts?
Submitted: 1 year ago.
Category: Family Law
Expert:  Lucy, Esq. replied 1 year ago.

Hi,

I'm Lucy, and I'd be happy to answer your questions today.

Why is the ex-wife paying the home equity loan at all if she's claiming not to have any obligation to pay it? Was this specific account discussed at all when they were talking about the settlement agreement? Was there anything stated like "all mortgages" or "all liens" would be paid rather than "the" mortgage? Or did the agreement say "The purchase money mortgage"? Did they list any specific accounts in the agreement?

Is he just trying to get her to refinance the property in her name only? Is she receiving alimony?

Customer: replied 1 year ago.
Hi Lucy:Thank you for your thoughts today. Below, please find the answers to your questions
.
Why is the ex-wife paying the home equity loan at all if she's claiming not to have any obligation to pay it?
She hasn't "verbally" stated she isn't going to pay it and is paying it monthly, but as soon as he requested she follow the divorce agreement and pay it off, she dropped her payments to the lowest amount allowed. My friend called the bank and they advised all she has to do is come in and fill out the paperwork to have his name removed. She doesn't have to refinance. There is no cost to change it.Was this specific account discussed at all when they were talking about the settlement agreement? Yes, verbally. Also, they prepared a spreadsheet showing all of the debt. I am obtaining that document now for review to see if this was included.Was there anything stated like "all mortgages" or "all liens" would be paid rather than "the" mortgage? Say theThe settlement document says under "Real Property":
Husband and wife agree that the former marital residence consists of a residential dwelling and real estate located at _______, WV. The parties agree that Wife shall retain sole ownership of the marital home. Wife will be responsible for payment of insurance thereon as the same becomes dues and payable. Within 45 days of the Family Court's adoption of the terms of this contract, Wife will pay off or otherwise refinance the current mortgage on said residence and shall hold Husband harmless from any liability arising therefrom and any other expenses related to said residence which are incurred after the date of separation. Wife shall be responsible for all as valorem real property taxes on the subject property.Under "Debts of the Marriage" the doc says:Except as otherwise provided herein, each party warrants that there are no other debts or obligations, including, but not limited to, education loans, car loans, credit card obligations, mortgages, or installment obligations of either party for which the other party is or could become liable, and each party specifically agrees to indemnify and hold the other harmless from any liability, loss or expense arising therefrom.
Or did the agreement say "The purchase money mortgage"? No, please see above. Did they list any specific accounts in the agreement? Obtaining the spreadsheet.Is he just trying to get her to refinance the property in her name only? Yes, he just wants his name off of the loan. She doesn't have to pay it off.Is she receiving alimony? Yes, 24 months ending on February 7, 2017.
Expert:  Lucy, Esq. replied 1 year ago.

Thank you.

That spreadsheet could be very important, because if it lists the home equity loan as a home equity loan and not as a mortgage, it's going to sink his argument. It's true that a home equity loan is a type of mortgage, but if there is ALSO a traditional mortgage and the paperwork only says "The mortgage," that can be reasonably construed to mean only the traditional mortgage.

I've honestly never encountered a bank that would remove someone's name from a loan account without the other party doing a refinance, especially when the person being removed is the wage earner at the time the loan was granted. But a judge could order the ex to either go to the bank and remove his name or produce documentation saying that they won't do it (such as a denial letter from a loan officer). So he can at least ask.

He essentially needs to prove one of two things:

1. That the home equity loan was intended by both of them to be included in the requirement that she pay the mortgage, or

2. That they forgot to include the home equity loan in the settlement agreement and that the judge should therefore distribute it as a marital assets.

In the second case, that doesn't automatically mean that your friend will win, but judges do frequently order that the person staying in a house make the payments, so if the alimony is enough to cover the loan along with her other living expenses, it is possible that a judge could order her to take over the loan and get his name off of it (as long as the bank will cooperate).