Gene Mundt - Let's Talk Mortgages & Real Estate!

     Divorce can be devastating.  With U.S. divorce rates hovering right around 49%, it's obvious that divorce and its far-reaching consequences touch many lives.

     Add the present housing crisis into the upheaval experienced during divorce and you find many Americans presently experiencing a great need for accurate financial and legal guidance.  While going through a divorce is probably the worst time to expect anyone to make sound financial decisions.  Yet, that is exactly when the demand for these decisions are being made.

     Certain precautions and actions should be taken during and immediately after divorce proceedings to protect yourself ... both financially and credit-wise.  Otherwise you may find yourself having to do major credit-repair afterwards, just when you hope to move-on with your life.

     Here are some major points to be considered, discussed, and then acted upon when divorcing, especially should you own a home with a soon-to-be ex-spouse:

•      EVERY credit account you have MUST be addressed in some manner within the divorce settlement.  
•      Leave nothing to chance.  If accounts and credit are still held jointly during the divorce process, make sure timely, consistent payments are being made. 
  
•      Keep records showing proof of your credit payments.  Ask that your spouse be required to do the same.
  
•      Be aware that creditors cannot close an account simply because you're divorcing.  But they CAN close an account that is held jointly if asked to do so.  That means your spouse can make that request.  The creditor can then require you to apply for new credit as an individual ... based on your individual financial status.
•      Have that discussion about the marital home.  Will it be sold?  Who would stay in the home?  Can one spouse buy out the other?
•      Remember:  Should there be an outstanding debt on the marital home, the residing-spouse must refinance the loan to their name only, should the exiting spouse wish to be totally relinquished from the remaining debt.
•      If the decision is made that one spouse will remain in the marital home, a Quit-Claim Deed must be prepared.  This Deed then transfers the title and rights to the property to the remaining spouse.
•      All creditors must be advised in writing of the removal of a spouse on an account.  Only then will the Credit Report reflect a change.
•      Seek your own legal counsel prior to taking any action.
•      Consult with a professional mortgage lender before you list your marital home or before buying another property.  Also remember that they are typically a great resource for credit reports and credit guidance during rough times.
  
•      After all divorce proceedings are through, re-check your credit to make sure all requests and changes are reflected on your report.  Do not assume that all has been correctly implemented.

     During the stressful and disquieting times of divorce, it is vital that you protect your finances and your financial interests.  That includes your credit scores.  Seek-out the guidance and service that you so sorely need at this time.  You will be glad that you made that effort and sought that path.

     The home mortgage crisis in the United States has spawned problems in the mortgage, real estate and banking industries, and many consumers are now facing mortgage payment increases in the coming months that could cause the number of home foreclosures to climb even higher. And all of those financial woes may be spawning another problem as well -- an increase in divorces, experts say.

     "A recent poll commissioned by divorce360.com ranked financial issues as the number two reason that Americans divorce, with abuse one of the main reasons for divorce in this country today." 

            (The above is from an article by:  Don Moore ... "Real Estate: Home Mortgage Crisis May Boost Divorces in U.S., Experts Say")

      When a marriage ends, it's a difficult time for both parties involved ... and for any children the couple may share.  Both emotionally and financially, divorce takes its toll.  This toll can be further exacerbated if one of the primary reasons for the divorce is foreclosure on a home or ongoing financial hardships. 

     With the present financial crisis being felt by so many, it is then no real surprise that across America many couples are reaching the decision to dissolve their marriage. 

     Because of ongoing strains felt financially and emotionally, it can be an extremely hard time to make important financial decisions for the future during the divorce process.  But, most times this is exactly when these decisions must be made.  The settlement of homeownership and dissolution of other shared financial accounts and concerns must be determined during this upheaval.

     As cold as it may sound, divorcing couples must always remember that marriage ... and its dissolution ... remains a business deal.  Steps must be taken to ensure that a fair and equitable ending is reached for both parties involved.  Each should be able to move into their future satisfied and prepared monetarily as best as the situation allows.

    It may seem nearly impossible at this time, but divorcing couples must take control of their lives again ... starting at this very point.  To accomplish this, they each should seek advisors that will assist them in making wise choices.  They need to create a "team" of advisors for themselves that are trustworthy, knowledgeable, and have the proven expertise to offer them sound advice during this transitional time in their lives.

    Some of the issues that should be discussed and resolved at this time may be:

•    Do you sell the property ... or will one party remain in the home?
•    If financial strains are an issue ... Do you file foreclosure or short-sale the home?
•    If retaining the marital property, a quit-claim deed must be prepared by legal counsel transferring the title and rights to the property to the remaining spouse.
•    If there is outstanding debt on the marital property, the remaining or residing party must refinance to his/her name only, allowing the exiting spouse to be relinquished of the mortgage debt.
•    Any joint debt or assets to be split must be evidenced in the Divorce Decree and the creditors advised in writing of the removal of one of the parties to effect the Credit Report properly.
•    Consultations with attorneys and professional mortgage loan advisors should be completed before taking any actions, such as listing the marital property or a party buying another property.
•    Establishing and repairing credit issues is important.  Make sure you cancel all joint accounts held with an ex-spouse.

     It is important to stress here ...

     Do not leave any legal issues unresolved after your divorce.  Your credit scores can be effected by your ex-spouse moving forward into the future should all legal issues not be taken care of properly.  Old problems and your ex-spouses financial stresses can become yours once again, if not resolved.

    Once your divorce is accomplished, it is wise to check your credit report again.  That way you make sure all previous issues are addressed and in order.

    Divorce and financial hardships are painful.  Taking the right steps during and after your divorce can restore your life and good credit.  If facing this situation currently, take measures to protect and heal yourself both emotionally and financially.  Partnering with strong, knowledgeable advisors is the first crucial step you should take towards re-establishing the peace of mind and healthy finances you deserve and so greatly need moving into your future.