Jump to content

Credit score went from 730 to 618 in two months. Pro-active recovery method?


The last post in this topic was posted 1826 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Recommended Posts

My husband and his first wife divorced 19 years ago. Per divorce decree, she got the house and was to refinance, but she never did. So now that she's filing Chapter 7 and losing the house, my husband's credit is taking big hits as she quit paying the mortgage.

 

We've talked to a lawyer and been told there's nothing we can do. Just have to try and rebuild afterwards. In the past, she was late on the mortgage payment and we found out because two credit cards lower their credit limits in response to the credit score falling. That hasn't happened yet, but would it be a good idea to contact all my husband's credit cards and explain the situation? Or let sleeping dogs alone?

Link to post
Share on other sites

My husband and his first wife divorced 19 years ago. Per divorce decree, she got the house and was to refinance, but she never did. So now that she's filing Chapter 7 and losing the house, my husband's credit is taking big hits as she quit paying the mortgage.

 

We've talked to a lawyer and been told there's nothing we can do. Just have to try and rebuild afterwards. In the past, she was late on the mortgage payment and we found out because two credit cards lower their credit limits in response to the credit score falling. That hasn't happened yet, but would it be a good idea to contact all my husband's credit cards and explain the situation? Or let sleeping dogs alone?

 

The house has at least 19 years of payments on it so it should have plenty of equity and it couldn't be refinanced w/o the EX's approval. Seems a foreclosure sale or sale in BK should be above water. The excess would probably go toward other debts the EX has but the bank should be made whole. Unless she has totally trashed the house. Even then home values after 2 decades are way higher and the land alone is almost certainly worth more than the mortgage balance. I'd do a little research on the valuation and potential sale price. A foreclosure is bad but if the debt was fully paid, as it likely will be, it would look a lot better on a review.

Edited by cashnocredit
Link to post
Share on other sites

 

My husband and his first wife divorced 19 years ago. Per divorce decree, she got the house and was to refinance, but she never did. So now that she's filing Chapter 7 and losing the house, my husband's credit is taking big hits as she quit paying the mortgage.

We've talked to a lawyer and been told there's nothing we can do. Just have to try and rebuild afterwards. In the past, she was late on the mortgage payment and we found out because two credit cards lower their credit limits in response to the credit score falling. That hasn't happened yet, but would it be a good idea to contact all my husband's credit cards and explain the situation? Or let sleeping dogs alone?

 

The house has at least 19 years of payments on it so it should have plenty of equity and it couldn't be refinanced w/o the EX's approval. Seems a foreclosure sale or sale in BK should be above water. The excess would probably go toward other debts the EX has but the bank should be made whole. Unless she has totally trashed the house. Even then home values after 2 decades are way higher and the land alone is almost certainly worth more than the mortgage balance. I'd do a little research on the valuation and potential sale price. A foreclosure is bad but if the debt was fully paid, as it likely will be, it would look a lot better on a review.

 

The original loan still has about $52K left on it. That's the one that my husband is co-debtor on. About five years ago, she took out a second mortgage on it for $50K. The house needs some minor repairs, yes, but it should be worth about $130K as is.

 

How long will husband's credit be sunk? Should we contact our creditors and explain the situation?

Link to post
Share on other sites

I would contact the divorce lawyer;

 

she was supposed to refinance, how did she get a 2nd without refinancing the first in her name only?

 

sounds like a violation of the divorce decree, or a shady lender

Link to post
Share on other sites

I would contact the divorce lawyer;

 

she was supposed to refinance, how did she get a 2nd without refinancing the first in her name only?

 

sounds like a violation of the divorce decree, or a shady lender

^^ THIS ^^

A copy of the divorce decree would clear him, I would think.

I also wonder how she got a second mortgage without his signature?? Also, you knew she didn't refinance because in the past she was late on payments and his score was falling????

Link to post
Share on other sites

A copy of the divorce decree would clear him, I would think.

 

Would clear him of what? If you think a creditor gives a damn about some divorce decree, you are mistaken. They care about the contract the parties signed and the terms agreed to at that time.

 

Also, I recall during a friend's divorce where there was a home with a small mortgage and plenty of equity. The remaining mortgage stayed in both names but he agreed to have his name removed from the deed/title/whatever you call it, so the home was hers alone. I believe his Ex was then able to later borrow against the equity without his approval or signature so long as that loan was secondary to the first mortgage. Or maybe he was just pathetic and made up the story so all his guy friends did not know he was helping out his Ex?

Link to post
Share on other sites

 

A copy of the divorce decree would clear him, I would think.

 

Would clear him of what? If you think a creditor gives a damn about some divorce decree, you are mistaken. They care about the contract the parties signed and the terms agreed to at that time.

 

Also, I recall during a friend's divorce where there was a home with a small mortgage and plenty of equity. The remaining mortgage stayed in both names but he agreed to have his name removed from the deed/title/whatever you call it, so the home was hers alone. I believe his Ex was then able to later borrow against the equity without his approval or signature so long as that loan was secondary to the first mortgage. Or maybe he was just pathetic and made up the story so all his guy friends did not know he was helping out his Ex?

 

 

I'm not a lawyer, but I would think your hubby has a claim. Unfortunately, that claim is against his ex. She is the one that violated the courts order, so she is responsible for the damage. So, you can sue, but since she probably doesn't have any money to make this right, the only thing you could really get out of this is a forced sale.

Link to post
Share on other sites

Your mortgage company is not going to care about what is in your husband's divorce decree. He needs to take her back to family court and have a judge find her in contempt.. but even so, it's going to be difficult to compel her to do anything. If her credit is shot, she's not going to be able to refinance. I would suggest trying to have her sign a quit claim deed to the house so it only leaves your husband on the mortgage... then have him either rent the house back to her or sell it. Either way, he needs legal advice here, not forum advice.

 

I went through something similar during my divorce, where my ex wife was living in the house and refusing to pay the mortgage (I have a thread about it from a few years ago in the mortgage forum here). I actually fought hard to win the house in the divorce, and I did. Even so, it was difficult and complicated to actually get her out of the house. Your husband needs to take some action, which is going to be a lot harder now, 19 years later.

Edited by JustMe74
Link to post
Share on other sites

Happened to me too. My ex-wife stopped paying in mid-2010 and house was returned to lender (Deed In Lieu of Foreclosure). My credit was shot since that time and in 2014 when I found this website I started my rebuilding process.

At the time, I went to a new divorce attorney and he filed motions to find her in contempt of court and asking for all remedies available including putting her in jail. Nothing ever came of out. I was just screwed credit wise.

 

The unbelievable part is that it was a vacation home that she could easily afford (she is a doctor) but she no longer wanted it because the market value had dropped.

 

I kept disputing the credit line but it was never removed from my CRA reports but I was little-by-little able to change little things here and there to now show $0 balance, 120 days past due (not foreclosure), last activity 2010 (removed all updates that made the mortage account seem current for FICO valuation), etc.

 

I had FICO in all 3 CRA between the range 700-720 for many years. Last year or 2 it went up to between 740-769. And this year it has gone to 769-792 on TU and EQ but surprisingly Experian removed the mortgage a few months ago without me requesting anything or creating disputes for the past 1 and a half years. My Experian jumped to 833 (based on what Amex reports for my FICO score). Mortgage is set to fall off my reports on May 2017 (12 months from now). I will attempt to have them removed 6 months early but I read that doesn't always work. Here hoping that November this year all 3 of my CRA reports are clean.

Edited by creditrepair2014
Link to post
Share on other sites

We've talked to about seven different attorneys (family/divorce/bankruptcy/all of the above) about this situation and all of them had the same response: my husband's credit is ruined by this. My question is "should my husband get in contact with his credit cards and explain why his FICO score is so low?" And "should he write the CRAs with a note to put in his file explaining about his ex-wife's BK?"

Link to post
Share on other sites

I would do the following:

1) wait until ex-wife finishes foreclosure process and account reports the way it will for 7 years.

2) find errors in the way the account is reporting and attempt to have the mortgage removed from the report

3) if removing the mortgage is not possible after trying various methods, then attempt to change the classification, reporting due balance, payment history, and other things that will make the mortgage report less-bad than it currently is. For example: 120+ days late is better than foreclosure. $0 balance due is better than $50K balance due.

 

I would not put a CRA consumer note because it will make it harder or impossible to attempt to completely remove the mortgage from his credit reports because he has in fact verified that the mortgage is in fact defaulted.

Edited by creditrepair2014
Link to post
Share on other sites

I would do the following:

1) wait until ex-wife finishes foreclosure process and account reports the way it will for 7 years.

2) find errors in the way the account is reporting and attempt to have the mortgage removed from the report

3) if removing the mortgage is not possible after trying various methods, then attempt to change the classification, reporting due balance, payment history, and other things that will make the mortgage report less-bad than it currently is. For example: 120+ days late is better than foreclosure. $0 balance due is better than $50K balance due.

 

I would not put a CRA consumer note because it will make it harder or impossible to attempt to completely remove the mortgage from his credit reports because he has in fact verified that the mortgage is in fact defaulted.

That sounds like a plan. Thank you!

Link to post
Share on other sites

My husband and his first wife divorced 19 years ago. Per divorce decree, she got the house and was to refinance, but she never did. So now that she's filing Chapter 7 and losing the house, my husband's credit is taking big hits as she quit paying the mortgage.

 

I went through a similar situation 22 years ago with my ex-wife. She got the house and made the house payments with the spousal support payments. When that stopped, she stopped making the payment. I got a letter from the mortgage company saying the late payments were stacking up and a foreclosure was on its way. I sent them a copy of the divorce decree that clearly showed her as the 'court ordered' sole responsible party on the mortgage, even though it was a joint mortgage. I also sent them a copy of the quit claim I filed shortly after the divorce which removed my name from the title. They ended up foreclosing a few months later and I never heard another word about it.

Link to post
Share on other sites

I had an friend that had almost the exact same thing happen to him about 15 years ago. Don't remember all the details, but here's what I remember.

 

After he found out what was going on he took over the house from his ex and made her sign a Quit Claim Deed. I think he used the courts to do this.

 

Then he had the 2nd mortgage removed from being attached to the home. He was able to do this because his signature was required on loan documents (it may have been forged, don't remember). His ex was still responsible for the debt but he nor the house could be pursued. Title insurance may have come into play.

 

He worked with the 1st mortgage company to make the mortgage current. His name was still on the mortgage so he was able to catch up the payments and basically own the home with lots of equity since the 2nd mortgage was now removed.

Edited by ClaimJumper
Link to post
Share on other sites

We've talked to about seven different attorneys (family/divorce/bankruptcy/all of the above) about this situation and all of them had the same response: my husband's credit is ruined by this. My question is "should my husband get in contact with his credit cards and explain why his FICO score is so low?" And "should he write the CRAs with a note to put in his file explaining about his ex-wife's BK?"

 

you can add a consumer comment, but it's not going to change the FICO Scoring .

 

I would run claim jumpers scenario - HOW DID SHE GET THAT 2ND MORTGAGE WITHOUT YOUR DH SIGGY?

Link to post
Share on other sites

HOW DID SHE GET THAT 2ND MORTGAGE WITHOUT YOUR DH SIGGY?

 

She got the second mortgage from the same lender as the first. Should she have needed his signature in order to get the second mortgage? She had him sign a quitclaim when they divorced. (He knows now what a giant mistake he made not getting own lawyer in the divorce.)

Link to post
Share on other sites

 

 

HOW DID SHE GET THAT 2ND MORTGAGE WITHOUT YOUR DH SIGGY?

 

She got the second mortgage from the same lender as the first. Should she have needed his signature in order to get the second mortgage? She had him sign a quitclaim when they divorced. (He knows now what a giant mistake he made not getting own lawyer in the divorce.)

Quitclaim gives ex the right to take out a second. w/o his signature. Should have been delayed to occur on re-financed.

Link to post
Share on other sites

 

A copy of the divorce decree would clear him, I would think.

 

Would clear him of what? If you think a creditor gives a damn about some divorce decree, you are mistaken. They care about the contract the parties signed and the terms agreed to at that time.

 

Also, I recall during a friend's divorce where there was a home with a small mortgage and plenty of equity. The remaining mortgage stayed in both names but he agreed to have his name removed from the deed/title/whatever you call it, so the home was hers alone. I believe his Ex was then able to later borrow against the equity without his approval or signature so long as that loan was secondary to the first mortgage. Or maybe he was just pathetic and made up the story so all his guy friends did not know he was helping out his Ex?

 

 

My other half went through a divorce with a car that was financed pre-divorce. It was stipulated that she should refinance the car but the judge said there's absolutely no way that he could enforce her to refinance; the financer/creditor (Nissan) could have cared less about the divorce decree or anything along those lines; they aren't legally obligated to take anyone off of a loan and often times will not as far as I'm aware. Her ex-husband hasn't made a single payment on the vehicle, luckily we got it and have made all the payments or her credit would be trashed right now.

 

In the end being pro-active and watching these debts (especially when he has access to the account in your case as he was a co-signer) could have saved his score, but now the damage is done - I'm not trying to sound like I'm scolding you, this is a warning for others who may see this thread.

Link to post
Share on other sites

The last post in this topic was posted 1826 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.




  • Member Statistics

    • Total Members
      180,881
    • Most Online
      2,046

    Newest Member
    Vision16
    Joined
×
×
  • Create New...

Important Information

Guidelines