I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear that this happened.
Unfortunately, yes, the bank can still foreclose. This is because the mortgage agreement is a promise to pay among everyone who signs onto it. When spouses get a mortgage together, even if they divorce, as far as the bank is concerned, both remain liable on the mortgage. The bank is not a party to the divorce, so nothing that happens in the courtroom or the divorce decree can take away their ability to collect payment - that would be a violation of due process. The document you're quoting from is only binding on the husband and the wife - but they still are each required under the original contract to make sure the mortgage is paid if they ant the house not to be foreclosed.
The aunt can go back to divorce court and seek an order that her ex-husband is in contempt of court. She can try to get a judgment that would let her garnish his wages or take money from his bank accounts until the money he was supposed to pay on the mortgage is repaid. She can also ask the judge to order him to pay fines and other penalties for violating the order. If he has the money and simply doesn't want to pay, she's even allowed to request jail.
Filing for bankruptcy may buy her some time, but it won't ultimately prevent foreclosure if no one pays the bank the money due. She will get a couple of months, which may help her get the money she needs from her ex-husband.
As far as the lien goes, it depends on whose name it's in and when it was placed - the house still legally belongs to the ex-husband if they never signed documents to take his name off it. Filing for bankruptcy won't help her with the lien at all if it's in her ex-husband's name. But she may be able to ask the divorce court judge to order that he pay the lien to avoid dissipating her remainder interest in the home. It may also help to ask the divorce court judge to order the house transferred to her name so she can avoid dealing with more liens against her ex-husband in the future. That first lien would have to be paid, but it could help her avoid future liens (assuming she is able to avoid foreclosure).
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