When there are other legal issues in addition to a foreclosure,
the housing situation becomes even more complicated. Especially in situations of
divorce, separation,
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outlet, or even domestic abuse, there is a greater tendency for families to
be broken apart and the basic issue of survival of either party to be
questioned. And even worse, cases of divorce and domestic violence have been
found to increase during times of high foreclosure rates and economic
recession.
In these cases, there may be both a foreclosure lawsuit and a
domestic relations lawsuit going on at the same time. The domestic relations
case involves an abuser and a survivor, while the home defense case involves
both of the former parties against the mortgage company. And neither case may
help resolve the other, unless there is a more united front in the home defense
case. In fact, a domestic relations case may limit the options the homeowners
have for saving the property.
Especially
if the abuser has stopped paying the mortgage, the legal counsel for the
survivor may have to go to court to obtain an order that continuing payments are
made. However, if a period of time has passed between the last payment and the
court order, the servicing company may require far greater than just the regular
monthly payment to be sent in. And lenders and servicing companies are not bound
by the terms of a domestic relations order,
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Some attorneys
will attempt to bring the mortgage company into the domestic relations case, but
this is not always successful. The times where it can be worth trying is if a
stay of foreclosure or acceleration of the mortgage is needed for only a short
period of time. In these instances, the domestic relations court may grant an
injunction against the mortgage company based on the terms of the order. But it
may be important to prove that payments will be made on time soon (within a
period of a few months, at most),
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Injunctive relief against a mortgage company may also be
sought if the servicer refuses to accept payments from a survivor whose name is
on the mortgage and the note,
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timberlands. If a party's name is on the note, the lender is unable to
refuse payment, despite a domestic relations court proceeding. In fact,
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payments from a party listed on the note may bar future foreclosure proceedings
or extend a redemption period guaranteed by law, as well as being a breach of
certain duties lenders have towards homeowners.
In cases where a
survivor's name is on the mortgage, but not on the note, the situation is
slightly more complicated. In these cases, it may be best to have ownership
rights and obligations of the note transferred to the survivor through an order
in the domestic relations court. However,
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party listed on the note to begin with may agree to a loan modification or other
agreement that makes the loan unaffordable for the other party. Owners who are
on the mortgage but not the note, however, may be able to file a Chapter 13
bankruptcy and cure the default, if the situation is
appropriate.
Thankfully, the issue of mortgage acceleration just due to
the transfer of the ownership rights in a domestic relations case is not
something to worry about,
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outlet. Contract law and federal law usually prohibit the lender from
accelerating a loan when there is a transfer of interest from an abuser to a
survivor. The Garn-St. Germain Depository Act of 1982 prohibits acceleration
when ownership is transferred between spouses, and the Equal Credit Opportunity
Act prohibits discrimination on the basis of marital status.
Selling a
property that is involved in a domestic relations case may be an option, but it
generally requires court approval to get the legal authority to move ahead with
this option. All ownership rights might need to be transferred to the seller, or
a power of attorney granting rights to negotiate a sale may be necessary,
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equity or debt, if there is a short sale, will need to be apportioned between
the parties.
In all cases where the ownership of a home may be
transferred or is in dispute due to a domestic relations lawsuit, it may be best
to file a lis pendens on the property. This can prevent against equity
stripping, further encumbering of the property, or transfer of the property,
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order which forbids withdrawing any additional funds from a home equity line of
credit (HELOC) or obtaining any additional mortgages on the
home.
Finally, if there are few other options than letting the house go
into foreclosure, survivors of domestic relations disputes may be able to obtain
a cash for keys offer from the lender. Tenants or former owners are offered
these deals as a way for the lender to entice people remaining in the property
not to cause any damage and to move out amicably. They often offer several
thousand dollars in exchange for a clean house and the keys. Servicing companies
should have few objections to paying a domestic violence survivor to move out of
a property to avoid eviction after foreclosure.
There are a whole range
of issues affecting a property in foreclosure, and many of these issues can be
exacerbated or added onto if there is also a domestic relations dispute,
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have adequate legal counsel for both the foreclosure help and the domestic
relations case in order to sort out as many of the details as possible.
Foreclosure is complicated and stressful enough without piling on additional
messy disputes and lawsuits.
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