Ex-wife in trouble with house

[headed4trouble]

Hello: new to the forums and I have been reading with great unease. I have a potentially gloomy situation.

My ex-wife kept our house in California when we divorced. We originally bought it as our primary residence and lived there, however by the time we divorced we had both moved out and it had been rented out. After the divorce she moved back to the house. My name was still jointly on the loans (her name as primary) and the agreement was that she would keep making the payments and live in the house until she could either refinance it or sell it to get my name off the loans. She had me quit-claim my interest over to her. This was at the beginning of 2007. The house was under water and she was unable to refinance it herself, but Countrywide did give her some kind of loan modification on the loans (I never signed anything) - my name remained on the loans though.

Lately, the ex has abandoned the house and stopped making payments. She informed me that she had a buyer for a short sale and was awaiting lender approval (the second loan is an Old Republic serviced by Countrywide), however that was months ago, the bank is stalling on approval and I am not sure if the buyer is still interested. The condition of the house is deteriorating rapidly. The late payments are showing up on my credit report. I have no control over any of this and my biggest concern is not that a short sale or foreclosure will affect my credit, it's that if the house is lost to either I will get a fat tax bill.

Numbers: Original purchase price in 2003 $299,000
Refinance 2005 while we were living together in the house: $416,000 ($368K + $46K Heloc)
Current loan amounts: a little less than the above
Current value of house $250K and sinking

Any ideas? I just don't know what to do. When the bank one day sends the inevitable 1099, will it just be in her name and SSN as primary or in both our names? She has written agreements to assume all tax liability but I think that it would be easier if she just got the 1099 in the first place.

Thanks for your advice in advance.

[ama125]

Yours is a first. I would maybe seek out the advice of an attorney, one that knows real estate. I have no great words of wisdom for you as this is out of my realm of knowledge. Perhaps someone else on here has some better advice for you. I wish you luck!

[Garry]

This reminds me of the old saying, its cheaper to keep her! Just had my 28th anniversary!

[so-cal-gal]

I suspect that as long as she really DOES fess up with the IRS AND has the means to cover any taxes owed, you should be ok but I'm no accountant.

As far as getting your name out of the mess and not having it on any 1099, I have no idea. Real Estate lawyer and/or some 'enrolled agent' accountants may both be able to handle this question.

[Irish Gal]

Originally Posted by Garry

This reminds me of the old saying, its cheaper to keep her! Just had my 28th anniversary!

Garry,

Happy anniversary !


"I think men who have a pierced ear are better prepared for marriage. They've experienced pain and bought jewelry."

Comedienne, Rita Rudner

[Garry]

Originally Posted by Irish Gal

Garry,

Happy anniversary !


"I think men who have a pierced ear are better prepared for marriage. They've experienced pain and bought jewelry."

Comedienne, Rita Rudner

Thank you, my hair is longer than my wifes so I also understand why she takes so long in the bathroom!

[Irish Gal]

Originally Posted by Garry

Thank you, my hair is longer than my wifes so I also understand why she takes so long in the bathroom!

Too funny !