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patricia caylor Asked:

My daughter and her husband are separated - he left the house about 4 months ago. He has not given her any support since he left. They have a house with a loan of approximately $322,000 - a mortgage payment of $2,200 principle and interest only. The tax appraisal on the house is near the load amount. Taxes and insurance would add approximately $500 more per month. She has been laid off from her job and has applied for unemployment - should draw about $230 unemployment pay plus $1500 per month child support ($750 after 9 more months as the oldest child will turn 18). Husband is self employed but tells her that his business is down and he is now only drawing one pay check per month ($500 net). He also works part time and makes approximately $1,200 per month. Medical insurance for him and my daughter currently comes out of the part time money ($100 per month). He has told her that he will take her off the insurance in December. He also just purchased a new care through the clunker campaign. My daughter's name is on the deed to the property but not on the mortgage. She has managed to keep the payments current until this month but she can no longer pay the full amount. When she contacted the mortgage company regarding a loan modification she was told that they did not qualify because they were not behind on their payments. She was told that she should try to refinance and try to sell the house even if it was a short sale. Husband wants to let the house foreclose - she does not - he has not agree to put it up for sale. Questions are: 1. Does he have to agree to put the house up for sale or can she do it on her own? 2. Does foreclosure affect her credit? 3. Does she have any obligation to pay the mortgage payment? He continuously tells her that she is as responsible for the payment as he is since her name is on the deed. 4. The loan company told her that foreclosure proceedings would not begin until the payments were three months behind. Is that true? In other words, if she makes a partial payment, say $1,000 per month, will the house ever go into foreclosure? She wants to do the right thing but needs whatever assistance is available to her - what are her options? This is a case of someone not being able to afford the amount of money that was loaned to him. [Germantown TN]

08/23/2009

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Answer Provided by: Susan Hufford [08/24/2009]
 

Patricia, If, in fact, your daughter is not on the mortgage then she is NOT responsible for the mortgage payment. But if she wants to live there then it looks like she'll have to make the payments since the husband isn't willing to. She can't sell the home without her husbands approval since he also owns the home. The foreclosure should not affect her credit. Yes, foreclosure proceedings will begin when they are 90 days past due. Even if she makes partial payments, they could still foreclose because "she" hasn't met the obligation of the note. The mortgage company may not be able to help her since she is not on the mortgage. If she signed a Note then she is on the mortgage and is equally responsible for the payment. The first thing she needs to make sure of, is that she is NOT on the note. Tell her to check her paper work from the loan closing. It doesn't sound like she will be able to refinance the mortgage since she doesn't have a job. I hope this helps! Susan Hufford