| When there are other legal issues in addition to a | | | | danger that the party listed on the note to begin |
| foreclosure, the housing situation becomes even | | | | with may agree to a loan modification or other |
| more complicated. Especially in situations of divorce, | | | | agreement that makes the loan unaffordable for the |
| separation, or even domestic abuse, there is a | | | | other party. Owners who are on the mortgage but |
| greater tendency for families to be broken apart and | | | | not the note, however, may be able to file a Chapter |
| the basic issue of survival of either party to be | | | | 13 bankruptcy and cure the default, if the situation is |
| questioned. And even worse, cases of divorce and | | | | appropriate. |
| domestic violence have been found to increase during | | | | Thankfully, the issue of mortgage acceleration just |
| times of high foreclosure rates and economic | | | | due to the transfer of the ownership rights in a |
| recession. | | | | domestic relations case is not something to worry |
| In these cases, there may be both a foreclosure | | | | about. Contract law and federal law usually prohibit |
| lawsuit and a domestic relations lawsuit going on at | | | | the lender from accelerating a loan when there is a |
| the same time. The domestic relations case involves | | | | transfer of interest from an abuser to a survivor. |
| an abuser and a survivor, while the home defense | | | | The Garn-St. Germain Depository Act of 1982 |
| case involves both of the former parties against the | | | | prohibits acceleration when ownership is transferred |
| mortgage company. And neither case may help | | | | between spouses, and the Equal Credit Opportunity |
| resolve the other, unless there is a more united front | | | | Act prohibits discrimination on the basis of marital |
| in the home defense case. In fact, a domestic | | | | status. |
| relations case may limit the options the homeowners | | | | Selling a property that is involved in a domestic |
| have for saving the property. | | | | relations case may be an option, but it generally |
| Especially if the abuser has stopped paying the | | | | requires court approval to get the legal authority to |
| mortgage, the legal counsel for the survivor may | | | | move ahead with this option. All ownership rights |
| have to go to court to obtain an order that | | | | might need to be transferred to the seller, or a |
| continuing payments are made. However, if a period | | | | power of attorney granting rights to negotiate a sale |
| of time has passed between the last payment and | | | | may be necessary. Any remaining equity or debt, if |
| the court order, the servicing company may require | | | | there is a short sale, will need to be apportioned |
| far greater than just the regular monthly payment to | | | | between the parties. |
| be sent in. And lenders and servicing companies are | | | | In all cases where the ownership of a home may be |
| not bound by the terms of a domestic relations | | | | transferred or is in dispute due to a domestic |
| order. | | | | relations lawsuit, it may be best to file a lis pendens |
| Some attorneys will attempt to bring the mortgage | | | | on the property. This can prevent against equity |
| company into the domestic relations case, but this is | | | | stripping, further encumbering of the property, or |
| not always successful. The times where it can be | | | | transfer of the property. There may also be a court |
| worth trying is if a stay of foreclosure or acceleration | | | | order which forbids withdrawing any additional funds |
| of the mortgage is needed for only a short period of | | | | from a home equity line of credit (HELOC) or |
| time. In these instances, the domestic relations court | | | | obtaining any additional mortgages on the home. |
| may grant an injunction against the mortgage | | | | Finally, if there are few other options than letting the |
| company based on the terms of the order. But it | | | | house go into foreclosure, survivors of domestic |
| may be important to prove that payments will be | | | | relations disputes may be able to obtain a cash for |
| made on time soon (within a period of a few | | | | keys offer from the lender. Tenants or former |
| months, at most). | | | | owners are offered these deals as a way for the |
| Injunctive relief against a mortgage company may | | | | lender to entice people remaining in the property not |
| also be sought if the servicer refuses to accept | | | | to cause any damage and to move out amicably. |
| payments from a survivor whose name is on the | | | | They often offer several thousand dollars in |
| mortgage and the note. If a party's name is on the | | | | exchange for a clean house and the keys. Servicing |
| note, the lender is unable to refuse payment, despite | | | | companies should have few objections to paying a |
| a domestic relations court proceeding. In fact, the | | | | domestic violence survivor to move out of a |
| refusal to accept payments from a party listed on | | | | property to avoid eviction after foreclosure. |
| the note may bar future foreclosure proceedings or | | | | There are a whole range of issues affecting a |
| extend a redemption period guaranteed by law, as | | | | property in foreclosure, and many of these issues |
| well as being a breach of certain duties lenders have | | | | can be exacerbated or added onto if there is also a |
| towards homeowners. | | | | domestic relations dispute. Homeowners should have |
| In cases where a survivor's name is on the | | | | adequate legal counsel for both the foreclosure help |
| mortgage, but not on the note, the situation is | | | | and the domestic relations case in order to sort out |
| slightly more complicated. In these cases, it may be | | | | as many of the details as possible. Foreclosure is |
| best to have ownership rights and obligations of the | | | | complicated and stressful enough without piling on |
| note transferred to the survivor through an order in | | | | additional messy disputes and lawsuits. |
| the domestic relations court. However, there is a | | | | |