Foreclosure on new wife's home.

[ClearwaterZiggy]

I was just recently married (10/6/2007) and I knew my wife was having financial difficulties, but I was unaware of HOW bad they really are. She purchased a house before we started dating, and got in WAY over her head with the mortgage. Even with both of our incomes now, we won't be able to afford the payments much longer and we'll likely lose the house in foreclosure, as the balance of the mortgage is currently significantly higher than the property's market value at this time.

If the house is foreclosed on, will this affect my credit, and can the lender come after my assets? My name is not on the deed and nowhere on the mortgage loan paperwork. Would my best bet be to divorce her now and "head for the hills" before things get worse?

 

[Duranie]

I do not see how your credit will be affected. Have both of you looked into seeing if the lender will agree to a short sale? Have you listed the house for sale? Foreclosed houses are sitting for months on end and the lenders are losing a ton of money. Many are agreeing to short sales. Also I believe the government is trying to put a freeze on foreclosures due to the recession but I do not know when it will take effect.

Please talk to a realtor and to the lender.

 

[ClearwaterZiggy]

The house is for sale. The balance on the mortgage is $235,000 and we put it up for sale for $249,000. 2 years ago, this would have been a fair price in this area, but now we've been told that the fair market value is only $214,000. Our savings have been nearly completely depleted from trying to stay current on the mortgage payment... so we won't be current much longer as we'll have to save a little bit to be able to move.