(Let’s get it out of the way: You aren’t my attorney. You probably never even studied law. Even if you are an attorney, you aren’t offering me legal advice. You may not even be a vertebrate. We’re just having a hypothetical discussion. Mileage may vary. Don’t try this at home. Cars don’t really fly.)
So, background: my ex-husband and I bought a house in the early 1990s, and divorced in 1996. Our decree of divorce gives him the right to live in the house (with him making the mortgage payment,) and stipulates that when the house is sold, we are to split the proceeds.
More background: Shortly after our divorce was final, the ex told me that he couldn’t keep up the payments, and that the house was being foreclosed upon. I seriously never gave this another thought, until very recently, when the ex- started sending messages via our daughter that he needed me to sign some paperwork to sell the house. 
I’m still learning the details, but it turns out that someone had (at some point, I don’t know how long this has been in place) signed a lease-purchase agreement, and now wants the house in his name. Apparently, it needs some work, and he wants it in his name before doing expensive stuff like putting on a new roof and a/c.
According to messages I’m receiving from my daughter, “no money is going to change hands, Dad says that it will get this off of your credit report.” Hmmm… seems awfully nice of him to help me out like that, right? :dubious:
My reading, though, is that my ex owes me half of the value of the house, minus the remainder of the mortgage. A bit more than just “hey, get this off your credit report!” And was he legally authorized to sign the lease-purchase agreement on my behalf? Are there other implications I’m not thinking of? (Naturally, I received a letter from the tenant at 3 PM the day before Thanksgiving, so I’ll have to wait until at least Monday to ask a non-internet lawyer, so I’m asking opinions here.)
Sooo…the house was not actually foreclosed on, then?
Sounds to me like ex-hubby owes you 1/2 the equity value of the house. I could be wrong. Listening to me could get you deported, incarcerated, impregnated, or otherwise inconvenienced. Don’t listen to me. Talk to a lawyer in your jurisdiction. And don’t sign anything until you do.
100%. (I know you’re going to but …)
I would reread your divorce agreement. Did it address what was going to happen to any additional equity gained during your husbands tenancy? If so it might be assumed that you were also willing to lose equity or there might actually be language in there to cover this situation.
The exact wording is:
“The title to the homeplace of the parties, located at XXX YY Street, ZZ County, ZZZZ City shall remain in both the Husband and Wifes [sic] name. The husband shall have the right to continue living in the home until it is sold. Husband will make payments on house until it is sold at which time equity will be equally divided between Husband and Wife.”
Apparently, though, Husband has agreed to accept the payments that have been made per the lease-purchase agreement, plus payoff of the mortgage. So… I assume a lawyer would likely advise that he owes me half of the value he has received? And would the lease-purchase agreement even be valid if it was signed by only one of the owners?
Your husband told you that he was letting a mortgage that’s half in your name go into foreclosure, and you never gave that another thought? And in the intervening 15 years, you’ve never had occasion to see if there was a foreclosure on your credit report?
It’s interesting that the tenant thinks he did not need your signature before but does need it now. I suppose he might not have a formal lease to purchase agreement. Maybe all this time he’s just been leasing, maybe with some vague assurance of a right of first refusal, and his attempt to purchase now is simply a separate proposed transaction. Of course, there’s still a question as to whether your ex had the right to lease the house without your approval, and what should have happened to the money the tenant has been paying.
Legalities aside, just looking at the no-money-changes-hands economics of the proposed deal, your ex seems to be taking the position that there is no equity in the house. I don’t see how that’s possible on a 20-year-old mortgage. No market is that far underwater.
Disclaimer: No lawyer-client relationship is created by or should be inferred from these remarks. Thi is just anonymous spitballing, not legal advice.
It’s a long story, Tom, but no, I didn’t have any reason to doubt that the bank had foreclosed, and by the time I was in a position to need a credit report, I assumed that the foreclosure was far enough in the past that it wasn’t showing up.
I don’t know what the current lease agreement looks like, nor how long the tenant has been there. I do know that the tax valuation on the house is about 50% higher than what we paid Yeah, there’s no way for there to be zero equity. And I assume that the ex couldn’t have taken a second mortgage or an equity loan without my signature, barring fraud. (Based on something that popped up when I got a credit report 3 years ago, that’s a possibility, though. At least 2 agencies seem to think that I at some point lived at his parents’ address. I never even lived in that state. Would a basic title search show the outstanding debts on the property? For obvious reasons, I don’t expect straight answer from the ex.)
At any rate, I can’t wait to see what an attorney makes of this.