In my final dissolution of marriage, the paragraph concerning the house reads as follows: "The Court awards the former marital residence to the Wife free and clear from any demand of the Husband. The Husband shall cooperate with the Wife in her attempt to modify or refinance the existing loan, or assist with any loss mitigation package established. If there is loss mitigation, then an appraisal shall be done to determine the fair market value thereof. However, if modification, refinancing of the loan, or loss mitigation is unsuccessful, then the Court hereby orders a deed in lieu of foreclosure. If there is a "short sale" or loss mitigation of the home occurs, then the Husband would be entitled to one half of the equity received therefrom. If the Wife is able to save, modify, mitigate, or refinance the existing loan on the subject property, then she shall pay to the Husband the sum of $5,000.00 for his interest." I cooperated with the bank and filled out all required paperwork, however a loan modification was denied. The house is up for a foreclosure auction. My ex-wife claims she can save the house if I sign a quit claim deed.
If the lender will release you then and only then sign a quit claim deed.
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Who does she want you to deed the home to? A deed does not extinguish either of your financial responsibility under the note and mortgage. I would suggest you consult with an experienced foreclosure attorney before signing anything.
Executing the deed will merely extinguish your interest as a title holder on the property. From your question, you apparently also executed the note (and the mortgage) because, if you did not, the Court would not have directed you to participate, nor would the bank request any information from you. By executing the quit claim deed, you will have relinquished your rights as a title holder and lose leverage in the event your ex-wife attempts to cheat you out of any equity due and owing under the terms of the dissolution agreement. It appears that the Judge did, in fact, build in provisions for your protection. Your maximum recovery, though, seems to be $5,000.00 from her if she is successful. Lenders will, at times, make odd requests in the mitigation process - this is not necessarily far-fetched, but if she's adamant about it, I would request to see something in writing from the lender. They will usually, in the short sale process, send written requests of what remains outstanding. Best of luck.
It would definitely be wise to seek the advice of an experienced foreclosure attorney in your area. But it does seem like you are not only on title but also responsible for the debt. You need to get more information regarding what her intentions are and how she will resolve the impending foreclosure and ensure that it will not have any negative impact on you. Best of luck.
Without question you need to consult with a real estate and foreclosure lawyer on this. There are too many unknown facts and variables here. You should also probably discuss the issue with the lawyer who helped you with a divorce if you had one. She or he may be able to give you some additional insight on this.
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