Forcing house sale after divorce?

[mpeill]

I have a son, who was married, and whilst married purchased a house with mortgage in joint names, him and his wife.
They have since divorced, and my son still lives in the house with his new partner.
His ex-wife wants her name off the existing mortgage, but the only way we see to do that is a new mortgage, since the house is
now only worth £80K (at best) where the existing mortgage still outstanding is £85K.
Can the ex-wife force a sale of the house?
Would she then be liable for half the loss that would be incurred in settling the mortgage?
My son does not want to sell since he has financial problems of his own and would be homeless!

[PlanB]

Re: Forcing house sale after divorce?

Do you know what was agreed about ownership of the house or any assets as part of the divorce settlement? Are there any children involved who are legally entitled to live in it until they reach a certain age? Was there anything in the settlement about who should take respnsiblility for the debt - a mortgage is seen as a debt but not in a bad way Sorry for the insensitive questions but the facts surrounding the divorce are probably relevant.

What your son wants to avoid is a situation where his ex-wife stops paying towards the mortgage (if she's supposed to) so then the property will get repossessed. Let's take a look at the broader picture and see what your son's options might be. But selling a house in negative equity is always a bad idea because the lender can still chase you for the shortfall for up to 12 years, and that would include her too since it's a joint debt and both are liable to pay it. Once she's knows this it could dampen her enthusiasm for selling it

[enquirer]

Re: Forcing house sale after divorce?

His ex-wife wants her name off the existing mortgage, but the only way we see to do that is a new mortgage ...

He might be able to remortgage, although given his financial situation, it is extremely likely the lender would decline.

The lender is also unlikely to agree to the ex wife coming off the existing mortgage (two targets are better than one, and after all, she might come into money later). Asking is for free, however.

Can the ex-wife force a sale of the house?

Possibly. A great deal would depend on the terms of the divorce and general circumstances.

Would she then be liable for half the loss that would be incurred in settling the mortgage?

Normally, Yes.

[FlamingParrot]

Re: Forcing house sale after divorce?

His ex-wife wants her name off the existing mortgage, but the only way we see to do that is a new mortgage, since the house is now only worth £80K (at best) where the existing mortgage still outstanding is £85K.
Can the ex-wife force a sale of the house?
Would she then be liable for half the loss that would be incurred in settling the mortgage?
My son does not want to sell since he has financial problems of his own and would be homeless!

What your son wants to avoid is a situation where his ex-wife stops paying towards the mortgage (if she's supposed to) so then the property will get repossessed. Let's take a look at the broader picture and see what your son's options might be. But selling a house in negative equity is always a bad idea because the lender can still chase you for the shortfall for up to 12 years, and that would include her too since it's a joint debt and both are liable to pay it. Once she's knows this it could dampen her enthusiasm for selling it

Knowing lenders, they will add all sorts of charges on top of the outstanding mortgage and probably sell the house for less than the market value as is so often the case with repossessions, in fact, they are often auctioned off for peanuts, so the shortfall would be much bigger than £5k! If there was Mortgage Indemnity Insurance (often compulsory for high LTV mortgages), the insurance would reimburse the lender and it would be the insurers doing the chasing. MII only covers the lender even though the borrower is forced to pay for it! :rant::rant:

[mpeill]

Re: Forcing house sale after divorce?

Evidentally there was never any "Settlement" as such, appart from the actual divorce. I think they just wanted appart at minimal cost.
In practice, the ex-wife left with my son's daughter (now aged 10), and ex-wife is now remarried and lives with new husband in their new home.
My son pays maintenance for his daughter, and access is by mutual agreement.
Ex-wife has never actually contributed to any mortage payments, neither whilst married nor since the divorce.
As you say, the current mortgage lender refuses to take ex-wife off the agreement.

[Picardlaw]

Re: Forcing house sale after divorce?

Dividing your property
The law says that married spouses share responsibility for
childcare, household management and earning income during their
marriage. In the eyes of the law, a marriage is an equal partnership.
When a marriage ends, the partnership is over and property has to be
divided.
To recognize the equal contribution of each person, the general
rule is that the value of any property that you acquired during your
marriage and that you still have when you separate must be divided
equally, 50-50. Property that you brought with you into your marriage is
yours to keep if your marriage ends. Any increase in the value of this
property during your marriage must be shared.
There are some exceptions to these rules. The law allows you
to keep the value of some property that you have at the end of your
marriage for yourself. This property is called excluded property. It
includes:
30  gifts you received during your marriage from someone other
than your spouse;
 property that you inherited during your marriage;
 money that you received from an insurance company
because someone died; and
 money that you got or that you have a right to get as a result
of a personal injury, like a car accident.
The family home is another exception to the general rules. The
law says that when your marriage ends, the full value of the family
home must be shared even if one of you owned the home before you
were married, received it as a gift or inherited it.
Unlike other types of property, you do not get to keep for
yourself what the house was worth at the time of your marriage.
You and your spouse can agree to a different split. Or, in some
circumstances, you can ask the court to divide things differently. The
court can only divide property differently in very special situations and
if a 50-50 split would be extremely unfair to one of you.
The legal rules that you have to follow to calculate the value of
your property and divide it between you and your spouse can be
complicated. It is a good idea to consult a lawyer about how the rules
apply in your case.
The next section will give you an idea of how these rules work.
Remember that this is only a description of the general rules. There
may be other rules and exceptions that would apply to the facts in your
case.
The first thing that you and your spouse must do is to
separately calculate the total value of your share of the family property
according to the rules set out in the law. You must be fair and honest
when you do this. If you go to court, you must prepare a full financial
report of all your property, debts and income. You must swear that it is
accurate.

[CleverClogs]

Re: Forcing house sale after divorce?

Dividing your property
The law says that married spouses share responsibility for
childcare, household management and earning income during their
marriage. In the eyes of the law, a marriage is an equal partnership.
When a marriage ends, the partnership is over and property has to be
divided. ... etc.

Lifted from http://www.divorceincanada.ca/equalization.htm by Picardlaw, our very own magpie.