Questions about a Lingering Divorce

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TA_Lurker
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Questions about a Lingering Divorce

Post by TA_Lurker »

Background
I'm here looking for help dealing with my parents. My parents divorced several years ago, in their late fifties, after almost 30 years of marriage. We were always a very upper-lower middle class family; my mother was a stay at home mom, and my father had a white collar government which he lost weeks after 9/11 and just as he was entering his prime earning years.

Income & Assets

My father has a pension that is not inflation adjusted. He splits this with my mother. Once split the pension is a sum that hardly covers the rent in this area (Metro Boston).

My father also has a part time job doing consulting work, though to hear my father tell it the small firm he works for is always on the verge of going under. This consulting work is my parents primary means of support.

My mother does not work. In addition to my father's pension and alimony she collects Social Security (her own, from before my parents were married) and Disability.

While in government my father was not required to pay into Social Security. He has been paying into the system in the last decade as a consultant.

Neither has any significant taxable or tax-deferred savings. Last year my mom cashed out the half of a traditional IRA she received from my dad to buy a used Toyota when her car died.

The Family Home
My mom lives alone in the family home. My parents still jointly own the family home, neither one could afford to buy the other out at the time of the divorce. Furthermore there's some kind of loan outstanding against the house. The balance of the loan is still more than $250k and the funds were used to put my sisters through college and on a partial renovation of the home after my father lost his job in the 2000s. Neither parent has really been able to explain the terms of the loan to me but they both swear that at some date in the near future it will be due and they'll be forced to sell the house to repay the bank. My dad is now telling me that the bank may call the loan early because property values are so strong in our area (Metro Boston, a 10 min walk to the MBTA, in a nice residential neighborhood). He sincerely believes a banker will show up at my mother's doorstep any day now with the local sheriff and demand $250k or else begin eviction proceedings immediately.

Questions
Is anyone familiar with the kind of loan my parents may have taken? I'm young (33) and don't own a home. I've asked friends who own and they're all baffled by the concept of a loan with a balloon payment and a due date. It doesn't make any sense. I believe that at one point my parents did own the home and then took out money against the house. I also know my mom pays the bank every month for the house.

I would like to pay a third party to help my parents figure out what to do with the home. What kind of professionals exist? Are nonprofits a better choice? The person would need to provide financial advice to my father, who has never been wrong about anything, and my mother, who cries in the face of any uncertainty. (Can you see why I don't want to be the man in the middle? :oops:) They would hopefully also be familiar with whatever government services are available for low income seniors.
ajcp
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Re: Questions about a Lingering Divorce

Post by ajcp »

TA_Lurker wrote: Questions
Is anyone familiar with the kind of loan my parents may have taken? I'm young (33) and don't own a home. I've asked friends who own and they're all baffled by the concept of a loan with a balloon payment and a due date. It doesn't make any sense. I believe that at one point my parents did own the home and then took out money against the house. I also know my mom pays the bank every month for the house.
They're less common, but balloon payment mortgages/loans do exist. First I'd get more information on what specifically the loan is. Maybe you can refinance it?
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cheese_breath
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Re: Questions about a Lingering Divorce

Post by cheese_breath »

It does sound like a balloon mortgage although I've never heard of one being callable early. Back in the '80s when the economy was good a lot of young professionals used them to get into homes they couldn't afford on their current incomes. The assumption was by the time the balloon came due their incomes would have progressed to the point where they could afford to remortgage the home. Your father, unaware that he would lose his job, may have figured he was still on the rising income track and would be able to remortgage when the balloon came due.

One thing you need to think about... if your father is 'never wrong' you may have a hard time getting him to accept advice from an outsider.

edit: Do you know how old this loan is? Back in the first decade of this century, before the housing crash, interest only mortgages were popular.

http://en.wikipedia.org/wiki/Interest-only_loan
Last edited by cheese_breath on Sat Mar 08, 2014 10:43 am, edited 1 time in total.
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TA_Lurker
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

cheese_breath wrote:It does sound like a balloon mortgage although I've never heard of one being callable early. Back in the '80s when the economy was good a lot of young professionals used them to get into homes they couldn't afford on their current incomes. The assumption was by the time the balloon came due their incomes would have progressed to the point where they could afford to remortgage the home.

One thing you need to think about... if your father is 'never wrong' you may have a hard time getting him to accept advice from an outsider.
I just had breakfast with my dad. It's a 20 year home equity loan due in either 2017 or 2018. They've been paying interest only on the loan and thus the full balance will be due when the term expires.
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cheese_breath
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Re: Questions about a Lingering Divorce

Post by cheese_breath »

TA_Lurker wrote:
cheese_breath wrote:It does sound like a balloon mortgage although I've never heard of one being callable early. Back in the '80s when the economy was good a lot of young professionals used them to get into homes they couldn't afford on their current incomes. The assumption was by the time the balloon came due their incomes would have progressed to the point where they could afford to remortgage the home.

One thing you need to think about... if your father is 'never wrong' you may have a hard time getting him to accept advice from an outsider.
I just had breakfast with my dad. It's a 20 year home equity loan due in either 2017 or 2018. They've been paying interest only on the loan and thus the full balance will be due when the term expires.
You replied just before I could edit my previous post to include the possibility of an interest only mortgage.
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TA_Lurker
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

My father, who was a lawyer for a few years before moving to a government job, is practiced in the art of filibustering other people to get his way. That combined with a figurative deaf ear for what his opponent says is a potent combination for never getting anywhere with him. Fortunately I'm my father's son and have learned to deal with the frustration of not being acknowledged and push back at him on his own terms with his own arguments. (I'm also grateful I learned empathy from my mom.)

Back to the topic: can anyone recommend a public or private resource for helping an aging parent examine their options? Google found an organization that specialize in divorce finance but I became suspicious when I saw several of the members work at Ameriprise. I know that's not a fiduciary firm.
freebeer
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Re: Questions about a Lingering Divorce

Post by freebeer »

For the home, the key question is how much equity is there. Given Boston RE market I assume it's well "above water". Independent of the rest of the financial analysis it would probably make sense to sell it immediately and divide/invest the proceeds, all you need for that is a RE agent. You mother clearly doesn't need that much house and the tax break from interest writeoff is probably negligible given their income situations so that move would improve their overall financial situation and avoid them having too many eggs in that one basket (Boston RE market).

Another key question is level of SS your father can expect if he keeps paying in at his current level until retirement age. calculator on SS.gov site can answer that.
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

cheese_breath wrote:
TA_Lurker wrote:
cheese_breath wrote:It does sound like a balloon mortgage although I've never heard of one being callable early. Back in the '80s when the economy was good a lot of young professionals used them to get into homes they couldn't afford on their current incomes. The assumption was by the time the balloon came due their incomes would have progressed to the point where they could afford to remortgage the home.

One thing you need to think about... if your father is 'never wrong' you may have a hard time getting him to accept advice from an outsider.
I just had breakfast with my dad. It's a 20 year home equity loan due in either 2017 or 2018. They've been paying interest only on the loan and thus the full balance will be due when the term expires.
You replied just before I could edit my previous post to include the possibility of an interest only mortgage.
My bad? :D

Thank you for taking an interest in my thread. Do you have any suggestions for dealing with an interest only mortgage? Is it the kind of loan that can be refinanced?
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cheese_breath
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Re: Questions about a Lingering Divorce

Post by cheese_breath »

I can't recommend any specific organization, but you may want to browse various senior forums on the Internet. I'm sure your parents aren't the first to encounter this or similar problems.
The surest way to know the future is when it becomes the past.
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

freebeer wrote:For the home, the key question is how much equity is there. Given Boston RE market I assume it's well "above water". Independent of the rest of the financial analysis it would probably make sense to sell it immediately and divide/invest the proceeds, all you need for that is a RE agent. You mother clearly doesn't need that much house and the tax break from interest writeoff is probably negligible given their income situations so that move would improve their overall financial situation and avoid them having too many eggs in that one basket (Boston RE market).

Another key question is level of SS your father can expect if he keeps paying in at his current level until retirement age. calculator on SS.gov site can answer that.
Hi Freebeer. Do you have any to spare? :sharebeer :sharebeer

Thankfully my parents are "above water". The house is not "move in ready" by HGTV standards but it has a newer roof, multiple bedrooms with good sized closets, solid walls, and a solid foundation. I also agree that mom doesn't need that much house. The problem is getting mom to agree. :D As far as I can tell she wants to hold onto the house and her comfortable lifestyle for as long as possible. She's not a planner and doesn't want to think about the day when she will need to reduce her lifestyle.
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

cheese_breath wrote:I can't recommend any specific organization, but you may want to browse various senior forums on the Internet. I'm sure your parents aren't the first to encounter this or similar problems.
That's a great idea. Thank you.
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Re: Questions about a Lingering Divorce

Post by cheese_breath »

TA_Lurker wrote:
cheese_breath wrote:
TA_Lurker wrote:
cheese_breath wrote:It does sound like a balloon mortgage although I've never heard of one being callable early. Back in the '80s when the economy was good a lot of young professionals used them to get into homes they couldn't afford on their current incomes. The assumption was by the time the balloon came due their incomes would have progressed to the point where they could afford to remortgage the home.

One thing you need to think about... if your father is 'never wrong' you may have a hard time getting him to accept advice from an outsider.
I just had breakfast with my dad. It's a 20 year home equity loan due in either 2017 or 2018. They've been paying interest only on the loan and thus the full balance will be due when the term expires.
You replied just before I could edit my previous post to include the possibility of an interest only mortgage.
My bad? :D

Thank you for taking an interest in my thread. Do you have any suggestions for dealing with an interest only mortgage? Is it the kind of loan that can be refinanced?
From what you say it turns out they have a home equity loan rather than an interest only mortgage. One possibility might be to talk to the lender and see if they would be willing to extend the current loan. But in the end obtaining any kind of loan whether home equity, mortgage or whatever is going to depend on the lender's evaluation of your parent's ability to repay it.
The surest way to know the future is when it becomes the past.
stan1
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Re: Questions about a Lingering Divorce

Post by stan1 »

TA_Lurker wrote: Back to the topic: can anyone recommend a public or private resource for helping an aging parent examine their options? Google found an organization that specialize in divorce finance but I became suspicious when I saw several of the members work at Ameriprise. I know that's not a fiduciary firm.
I feel your frustration. My mom sold her house in 2013. Although she was quite a bit older than your mom and was unable to take care of her house she still didn't want to leave. We ended up telling her the U-Haul was showing up on a specific date and she would be moving. At closing we found out that my dad had a lien on the house for $25,000 for his part of the house (fortunately without interest as their divorce was in 1985 and interest rates back then were high!). My mom "forgot" to tell me about this and was hoping the debt would be forgiven since my dad passed away in 1998. We ended up having to give $25K to my dad's next of kin (his second wife) which was very frustrating because I expect my mom will eventually end up in an assisted living/long term care situation.

I think you'll need to deal with selling the house sooner rather than later.

One thought: this is no longer a divorce issue, its one house sale (including paying off loans and dividing the proceeds) and two retirement plans for low income seniors. The escrow company will take care of paying off any outstanding loans and splitting the proceeds; that's the easy part. The harder part will be figuring out how to invest the proceeds.
Last edited by stan1 on Sat Mar 08, 2014 11:10 am, edited 1 time in total.
Mike Scott
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Re: Questions about a Lingering Divorce

Post by Mike Scott »

Without knowing any more about it it is hard to be specific but it sounds like there is an asset (house) which could be sold to settle outstanding debts and they could move somewhere with a lower cost of living and "start over". On the other hand, it also sounds like they will do as they please and perhaps the best advice is for you to stay out of what sounds like a financial/family/emotional mess that is of their own making. They probably won't listen to you anyway. :)
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Re: Questions about a Lingering Divorce

Post by dailybagel »

Are both parents open to the idea of selling the house?

I agree with Michael Scott's suggestion to tread carefully. Even though you would be helping, you'd be the messenger of an unfortunate reality in your parents' situation: they may not be able to keep their current home.
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

stan1 wrote:
TA_Lurker wrote: Back to the topic: can anyone recommend a public or private resource for helping an aging parent examine their options? Google found an organization that specialize in divorce finance but I became suspicious when I saw several of the members work at Ameriprise. I know that's not a fiduciary firm.
I feel your frustration. My mom sold her house in 2013. Although she was quite a bit older than your mom and was unable to take care of her house she still didn't want to leave. We ended up telling her the U-Haul was showing up on a specific date and she would be moving. At closing we found out that my dad had a lien on the house for $25,000 for his part of the house (fortunately without interest as their divorce was in 1985 and interest rates back then were high!). My mom "forgot" to tell me about this and was hoping the debt would be forgiven since my dad passed away in 1998. We ended up having to give $25K to my dad's next of kin (his second wife) which was very frustrating because I expect my mom will eventually end up in an assisted living/long term care situation.

I think you'll need to deal with selling the house sooner rather than later.

One thought: this is no longer a divorce issue, its one house sale (including paying off loans and dividing the proceeds) and two retirement plans for low income seniors. The escrow company will take care of paying off any outstanding loans and splitting the proceeds; that's the easy part. The harder part will be figuring out how to invest the proceeds.
Hi Stan. Thank you for sharing your experience and thank you for reframing the question. You're right that it is about retirement planning for low income seniors. Fortunately my father has a brother that owns several apartments so I know my father will never be without a home.

Do you have any siblings? How did you all agree to sell your mother's home? I have two siblings, sisters, and as far as I can tell their only goal is to not do anything that would make mom cry. One sister lives on the other side of the country while the other is local and wants to move back into the family house. She tells everyone she is doing it "to save money" but I think she is doing it to help support my mom. I think that's very noble of her but it kind of frustrates me that she made a decision like that without consulting her siblings. The last thing I want is for her to resent me in thirty years because she "supported mom" and I "didn't".
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

dailybagel wrote:Are both parents open to the idea of selling the house?

I agree with Michael Scott's suggestion to tread carefully. Even though you would be helping, you'd be the messenger of an unfortunate reality in your parents' situation: they may not be able to keep their current home.
DailyBagel & Michael Scott: I very much agree with your advice to stay out of it. I've stayed out of it (my parents finances and arrangements) for a long time now. Unfortunately my dad opened up the first great family text war since the divorce this week. I think he has some legitimate concerns and is sincere in his motives, but he's a sixty two year old man that has absolutely no idea how to communicate with his daughters. Thus family war has come to me.
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Re: Questions about a Lingering Divorce

Post by stan1 »

TA_Lurker wrote:

Do you have any siblings? How did you all agree to sell your mother's home? I have two siblings, sisters, and as far as I can tell their only goal is to not do anything that would make mom cry. One sister lives on the other side of the country while the other is local and wants to move back into the family house. She tells everyone she is doing it "to save money" but I think she is doing it to help support my mom. I think that's very noble of her but it kind of frustrates me that she made a decision like that without consulting her siblings. The last thing I want is for her to resent me in thirty years because she "supported mom" and I "didn't".
I do have a brother, and my mom moved into an unsubsidized senior apartment about 5 minutes from his house. It also took him about 5 years to accept that she would have to live close to him. I didn't pressure him to make this decision but we both agreed she could no longer live by herself. My mom is also a crier and is high maintenance. My brother has much more patience with her than I do but there was also an economic factor: I live in a very high cost of living area and my brother lives in a very low cost of living area. Rent in a senior complex and assisted living/nursing home care is twice as much where I live than where my brother lives.

It's wonderful that your sister (and I think you) care about your parents. If your sister cares enough about mom to move in with her I really doubt she would resent you for not supporting mom. There are many ways to support. My brother lives near my mom and takes her to the grocery store and fixes her many self inflicted computer problems, but I pay about 1/3 of her monthly rent and manage her finances.

I think the best way to work through this is with communication. Let your sister know you appreciate her moving in and figure out ways to help such as by managing mom's finances, contributing to household expenses, or giving your sister some time away from mom if she needs a break.
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Re: Questions about a Lingering Divorce

Post by Twins Fan »

I'm confused as to how this is lingering. The divorce is final, so this should all be laid out or separated in the divorce papers. Have you seen those yet?

This loan should be assigned, split, or some sort of date given to be in one name or another. In a divorce, loans are not just left flapping to be figured out later.

Who is responsible for the loan per the divorce paperwork?
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Re: Questions about a Lingering Divorce

Post by cheese_breath »

Twins Fan wrote:I'm confused as to how this is lingering. The divorce is final, so this should all be laid out or separated in the divorce papers. Have you seen those yet?

This loan should be assigned, split, or some sort of date given to be in one name or another. In a divorce, loans are not just left flapping to be figured out later.

Who is responsible for the loan per the divorce paperwork?
If the loan is in both their names I think the lender would have something to say about that. I doubt they would be willing to let one party off the hook, and I don't know if the court would interfere with that. I got the house and the kids in my divorce, and she gave me a quit claim deed for the house. But when I asked the bank to take her name off the mortgage they refused. So I owned the house, but she was still as responsible for the mortgage as I was. If I had defaulted (I didn't) they would have come after her.
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Re: Questions about a Lingering Divorce

Post by Watty »

He sincerely believes a banker will show up at my mother's doorstep any day now with the local sheriff and demand $250k or else begin eviction proceedings immediately.
He is exaggerating about them calling the loan if it is being paid on time but Massachusetts is a nonjudicial foreclosure state which means that a home foreclosure does not have to go through a big court process to foreclose on the house so if she gets behind in the loan or does not pay the balloon when it is due then she could be evicted in about 90 days.

If the loan is not being paid and she has been getting paperwork from the bank that she is ignoring then yes she could be evicted 90 days after she got the paperwork.

http://www.nolo.com/legal-encyclopedia/ ... -laws.html

Where there is substantial home equity it is not uncommon for the bank to let the process drag on for while since they will be accruing lots of penalties and late fees that they can take out of the home equity when the house is sold.

One thing that you might suggest to is that it would be good to have a real estate agent come by the house just to give them a ballpark idea of what the house would sell for just for informational purposes. Be up front with the real estate agent about that they are only considering if they should sell it or not.

I suspect once she see the that she could net a figure of $xxx,xxx moving to a condo or apartment might look a lot better.

One thing to watch out for is that she may only get alimony for a limited time so she may need to prepared to live on less when that stops.
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Re: Questions about a Lingering Divorce

Post by porcupine »

dailybagel wrote:Are both parents open to the idea of selling the house?

I agree with Michael Scott's suggestion to tread carefully. Even though you would be helping, you'd be the messenger of an unfortunate reality in your parents' situation: they may not be able to keep their current home.
+1.

OP: Is there any way one of you (three?) siblings - or all of you, in turns - can host your mother? If so, you might be able to present a win-win solution to your parents. Sell the home, split the equity. No more house payments (towards this house) for either of them. Plus mother can put some money down to buy another, maybe smaller, place (anywhere she prefers - northeast or FL!) if she wishes.

But do tread carefully! You don't to get trampled by everyone! :oops:

- Porcupine
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Re: Questions about a Lingering Divorce

Post by Twins Fan »

cheese_breath wrote:
Twins Fan wrote:I'm confused as to how this is lingering. The divorce is final, so this should all be laid out or separated in the divorce papers. Have you seen those yet?

This loan should be assigned, split, or some sort of date given to be in one name or another. In a divorce, loans are not just left flapping to be figured out later.

Who is responsible for the loan per the divorce paperwork?
If the loan is in both their names I think the lender would have something to say about that. I doubt they would be willing to let one party off the hook, and I don't know if the court would interfere with that. I got the house and the kids in my divorce, and she gave me a quit claim deed for the house. But when I asked the bank to take her name off the mortgage they refused. So I owned the house, but she was still as responsible for the mortgage as I was. If I had defaulted (I didn't) they would have come after her.
Correct, but it was all spelled out in the divorce papers, right? And, you could have refinanced it into just your name... I did that.

I've been through this too... not just talking out my rear here. :D

OP, if they sold the house now, who gets the proceeds? Dad may be trying to scare mom into selling because the proceeds go to him? I don't know this... just saying maybe that's the way the divorce is written up.

Who has been making the interest only payments since the divorce was final?

This should all be spelled out in the divorce papers.
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

Twins Fan wrote: Correct, but it was all spelled out in the divorce papers, right? And, you could have refinanced it into just your name... I did that.

I've been through this too... not just talking out my rear here. :D

OP, if they sold the house now, who gets the proceeds? Dad may be trying to scare mom into selling because the proceeds go to him? I don't know this... just saying maybe that's the way the divorce is written up.

Who has been making the interest only payments since the divorce was final?

This should all be spelled out in the divorce papers.
Hi Twins Fan, I've never seen a copy of my parents divorce papers but both parents act as if there is no agreement for how long the house is to be jointly held. I suggested that part of the problem is that the two of them have not come together as co-owners of the house and agreed on a timetable for selling it, to which he got upset and said my mom could stay as long as she wants. He says he's not trying to force her out of the house.

He also mentioned that the bank "doesn't know" they are divorced and if the bank "found out" they would call the loan. He still gets a lot of mail to the family house to make it looks like he still lives there.

My Dad asked me about buying the house. I think the property has great potential but given my state median income I couldn't afford to do much more than cover the bills myself, let alone make upgrades. I also don't want to move back in with mom, her yappy dogs, and the various associated headaches. I have a friend who had to return to the nest and purchase the family home to keep his parents afloat; let's just say I don't envy my noble friend.

(edited to correct quote levels)
Last edited by TA_Lurker on Sat Mar 08, 2014 2:38 pm, edited 1 time in total.
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

Watty wrote:
He sincerely believes a banker will show up at my mother's doorstep any day now with the local sheriff and demand $250k or else begin eviction proceedings immediately.
He is exaggerating about them calling the loan if it is being paid on time but Massachusetts is a nonjudicial foreclosure state which means that a home foreclosure does not have to go through a big court process to foreclose on the house so if she gets behind in the loan or does not pay the balloon when it is due then she could be evicted in about 90 days.

If the loan is not being paid and she has been getting paperwork from the bank that she is ignoring then yes she could be evicted 90 days after she got the paperwork.
Watty thanks for your reply. I was wondering about the eviction process, so thank you for providing the details and that link.

I don't know for a fact that she isn't meeting her obligations to the bank. I have no idea how she manages her books. I think the whole family needs some kind of transparency on the matter. I've thought about paying for her to meet with a financial planner who can go through her past few tax returns and sort this whole thing out. I don't even need to know the details.

I could also cover the the interest due to the bank for a short while if need be. That is within my means but I'm keeping that card close to the vest.
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Re: Questions about a Lingering Divorce

Post by TA_Lurker »

porcupine wrote:
dailybagel wrote:Are both parents open to the idea of selling the house?

I agree with Michael Scott's suggestion to tread carefully. Even though you would be helping, you'd be the messenger of an unfortunate reality in your parents' situation: they may not be able to keep their current home.
+1.

OP: Is there any way one of you (three?) siblings - or all of you, in turns - can host your mother? If so, you might be able to present a win-win solution to your parents. Sell the home, split the equity. No more house payments (towards this house) for either of them. Plus mother can put some money down to buy another, maybe smaller, place (anywhere she prefers - northeast or FL!) if she wishes.

But do tread carefully! You don't to get trampled by everyone! :oops:

- Porcupine
Thanks for the suggestion. I'm the oldest, in my early thirties, and still rent, though I hope to buy a condo or small home in the next year or two. Next in line lives on the other side of the country, she is pursuing her PhD in a humanities field, and then will be on the chase for a tenure track job. Last child is a millennial with a masters degree in foreign languages who has had a tough time launching her career given the cutbacks in K-12 education at the local levels. Things are looking up for her but she rents and probably won't be buying a home anytime soon.
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Re: Questions about a Lingering Divorce

Post by Twins Fan »

People act all kinds of ways though... and, given what you have said about your parents' personalities I doubt you're getting the full story. Get a look at the divorce papers, probably from mom since dad doesn't sound like he'd be willing to share, and see what they say. Those are court documents, have some standing, and will at least give you a direction to head in all this.

I'm sure the bank has no idea about the divorce. As cheese_breath said, they most likely would want both parties to remain on the loan anyway. They want to have another name to go after. Even though in this case it doesn't sound like there's much to go after other than the house. I should add that I was simply thinking of a mortgage earlier. I'm not sure how a HELOC/HEL works and if they can be refinanced somehow.

From the sounds of it, selling is probably the best option. I mean can either of them afford to take on the loan when the principal comes due? Doesn't sound like it.
Spirit Rider
Posts: 13913
Joined: Fri Mar 02, 2007 2:39 pm

Re: Questions about a Lingering Divorce

Post by Spirit Rider »

TA_Lurker wrote:I just had breakfast with my dad. It's a 20 year home equity loan due in either 2017 or 2018. They've been paying interest only on the loan and thus the full balance will be due when the term expires.
Are you sure this is a home equity loan due in 2017/2018. It sounds more like a Home Equity Line Of Credit (HELOC) where there is a draw period (extendable) where only interest payments are required. Then it goes into repayment mode where the balance is amortized over a fixed period of principal and interest payments.
gwrvmd
Posts: 820
Joined: Wed Dec 02, 2009 8:34 pm
Location: Calabash NC

Re: Questions about a Lingering Divorce

Post by gwrvmd »

I would suggest 1) Get a real estate appraisal of the value of the house. Real estate agents will tell you how it get a professional appraiser and pay for a private appraisal, about $300-500
2) Find out the amount of the home equity loan and the due date. If it is due in 2015 or later, you have at least a year to figure out your options....Gordon
Disciple of John Neff
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