I bought a home in 2009 with my wife, since we divorced and I have moved out of state and she has continued to keep the home occupied with tenants, collecting rent and paying the mortgage. Our names are on both the deed and mortgage. Because of an oversight in the HOA dues, a lien was placed on the property and now a foreclosure has started. I do not want a foreclosure on my record. She does not care. I suggested that I pay the overdue balance and get the lien released and then we sell the property ASAP. Currently there are tenants in the home for the next 9 months. She would rather it go into foreclosure then see me get any money out of the deal once the home is sold. I guess I need to know my options. I know a quit claim will not release me from the mortgage and I assume a partition agreement will not either. I don't trust her to keep the mortgage in good standing, is my only option a refinance to take my name off the mortgage and then sign a quit claim?
3 Answers from Attorneys
You can pay the HOA the amount due to stop the foreclosure then file a partition action to force a sale of the house. In a partition action (a lawsuit) you ask the court for an order determining each party's interest in the property, sell the property and divide the proceeds of sale between the owners after deducting the cost of sale. In many instances these suits are settled in the early stages of litigation because it is much more expensive to continue the suit and sell than simply agreeing to sell the property and both parties receive more of the sale price.
Mr. Hoffman MAY be correct. The trouble is, all this should have been dealt with in your divorce, and may have been dealt with at least in part in ways that affect your options. You may have a very simple problem of enforcing a divorce judgement, or you may have a real mess on your hands if your divorce did not allocate responsibilities and rights in the property at all. You need to see a real estate savvy divorce lawyer and bring your divorce papers to go over this situation. You may have no right to partition based on the divorce, or maybe you do. No way to tell without getting into the details. I maintain office facilities in Sacramento, and would be happy to provide you a consultation if you are interested.
I'd go with Mr. McCormick's analysis, and add that an important aspect of your overall strategy must be to determine how much equity is in the house and how important, financially, is it to preserve your rights, prevent liens and foreclosure, etc. In today's market, sloppy financial practices that allow liens and threaten foreclosure may be real dumb, when properties may command prices not seen since the 2006-07 era. On the other hand, if the house is nearly to completely under water, maybe it's wiser to let it go than to spend a pile of money on lawsuits.