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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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My daughter got a divorce in 2010 and her husband took their

Resolved Question:

My daughter got a divorce in 2010 and her husband took their home in the settlement. The home was 2 years old and both were on the loan. The ex-husband notified my daughter today that he could not make the house payment and was going to move out and default on the loan. My daughter just re-married this month and she and her new husband live in an apartment. The new husband says that even though he could make the house payment, he does not want the home and moving there is not an option. Right now my daughter has an almost perfect 750 credit score. How will this default affect her and what options does she have? All of this is going on in Houston, Texas
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
1) What is the current market value of the house?
2) What is the balance of the mortgage?
Customer: replied 5 years ago.
1) I don't know what the current market value is, but would bet it's far below the mortgage balance.

2) The mortgage balance is approximately $125,000.00
Expert:  cfortunato replied 5 years ago.
If the house goes into foreclosure, her credit score will drop around 250 points.
Two options exist to avoid foreclosure - short sale and deed in lieu of foreclosure, but both require the lender's approval. With a short sale, the lender allows the house to be sold for the market value instead ofvthe balance of the mortgage. For a deed in lieu of foreclosure, the lender agrees to take the house instead of going through the time and expense of a foreclosure action.
A short sale or a deed in lieu of foreclosure will result in a around a 150-point reduction in the credit score.

I think this is what you wanted to know. If not, please let me know.
Thank you.
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