Ex-Wife Didn’t Take Ex-Husband’s Name Off the Mortgage – After Hurting His Credit, She Has to Sell the House
By Snyder & Sarno on December 01, 2015
Nowadays, it is fairly common for one spouse to remain in the marital home after a divorce. Usually, the spouse who keeps the house is required to refinance the mortgage so that it is in his or her name only. But if the residing spouse fails to switch the mortgage, the other spouse can be unfairly negatively impacted. The Ocean County Superior Court addressed this issue last week.
In L.H. v. D.H., the former couple entered into a settlement agreement that allowed the ex-wife to keep the marital residence, as long as she refinanced the mortgage to remove her ex-husband’s name. The $230,000 house had an outstanding mortgage of just over $200,000 when the settlement agreement was signed.
Despite continuing to live in the house, the ex-wife never removed her ex-husband’s name from the mortgage. While she did make the mortgage payments every month, she sometimes paid late. Unbeknownst to the ex-husband, the mortgage was hurting his credit. In 2014 and 2015, he applied for a mortgage to purchase a home for himself, but he could not get a reasonable interest rate. His ex-wife’s failure to remove his name from his old mortgage had lowered his credit score.
The ex-husband filed a post-judgment motion seeking to compel his ex-wife to sell the house and pay off the mortgage or to give him power of attorney so that he would have the authority to sell the house through a realtor. He requested that his ex-wife be removed from the house if necessary.
Agreeing with the ex-husband, the judge granted his motion and ordered the home to be listed for sale within 30 days. The ex-wife had had three years to refinance the mortgage, but she never did. If she fails to list the home after this ruling, the judge will give the ex-husband power of attorney to list it himself. Until the house is sold, the ex-wife is required to make all mortgage payments on time. If she obstructs the sale, the court may remove her from the home.
The judge emphasized the critical importance of credit ratings in today’s society, particularly at such a time in a person’s life when he may need to rebuild himself or herself financially. Further, the judge held that even if an ex-spouse had not missed any mortgage payments, yet still failed to remove her ex-spouse’s name from the mortgage, the court may take action against her in order to prevent any future damage to her ex-spouse’s credit. The decisions in this case may set a new precedent for family court judges who are presented with similar situations.
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