Simple Divorce Advice

The winds of economic change in the housing market have blown the equity out of many homes. The days are gone when home buyers could trust that they would have appreciation of 5-7% a year….buyers gladly paid “over the asking price” for desirable locations…and minor updates and repairs would reap huge bottom line benefits for sellers. Instead….homes purchased in the last five years are likely to have no equity. Homeowners who used the equity of “the days of old” and took out home equity loans and lines of credit to buy a car, finance education, finish a basement are now finding themselves with more debt than equity. Neither spouse can afford to stay in the house alone or with the children and with another rent payment added to the expense of living separately.
There are couples who are counseled to …”just let the house go into foreclosure” because they will not be getting any proceeds from the sale. Foreclosure is a horrendous devastation to credit which has a lasting effect for approximately 10 years. We believe as Realtors, that no house has to go into foreclosure….here are just some of the reasons why this choice is not one that any couple should make:

• A homeowner who loses a home to foreclosure is ineligible for a Fanny Mae backed mortgage for up to 7 years.
• Future home loans will have higher rates
• Credit scores will drop hundreds of points and remain at low levels for years
• Foreclosure will appear on a credit record for at least 7 years
• Risk termination of any job requiring security clearance – police,CIA,security officers
• Challenges by current and future employers who do credit checks
• The right of lenders in some states to pursue a deficiency judgment

A couple facing the difficult situation of having to sell a home that has no equity should consult a realtor and/or real estate attorney who can analyze what alternatives to foreclosure best suit the couple’s specific housing situation

Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
REDS (Real Estate Divorce Specialists) CDPE (Certified Distressed Property Experts) and members of the Institute of Luxury Home Marketing.
www.HansonRealEsate.Net

Source: The House is Ordered by the Court to be Sold…..Proceeds Won’t Pay the Mortgage

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