QUESTION
Can my mortgage company call in my mortgage which my ex husband remains on if he files for bankruptcy?
Asked on Sep 26th, 2015 on Bankruptcy - Ohio
More details to this question:
At the time of our divorce I bought my ex out of our house. We had two mortgages at the time. I was the sole borrower on our primary mortgage and we were co-borrowers on a small secondary mortgage. Our divorce decree did not push for refinancing and I don't think he realized he remained on that mortgage until recently. I never said anything because I was unable to and have been unable to (due to the housing market) refinance both mortgages to get him off the smaller mortgage and I was afraid the mortgage company might call in my loan. Thus his name has remained for the last 5 years on a mortgage which I have continued to pay on and have always done so on time. I have never missed a payment. Now my ex is filling for bankruptcy and has realized he is still on that mortgage. My questions is, once he files for bankruptcy can the mortgage company call in my mortgage or will they continue to let me pay on it since I have always kept it in good standing? I am now remarried and and am once again hoping to refinance but I need to know what will happen if he declares bankruptcy first.
5 ANSWERS
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Since mortgage payments are current because of your regular payments, it would be very strange if the mortgage lender sought to accelerate or foreclose on your mortgage. A creditor wants a dependable borrower, after all. On the other hand, some lenders simply do not recognise their own interests. Therefore, dig out your mortgage and accompanying mortgage note and read them with care. (Use a magnifying glass if necessary.) Look especially for a section entitled 'Events of Default,' or something very similar. Sometimes a document may refer to a bankruptcy by one of the borrowers as an event of default, but it may not be enforceable in court especially if payments are current. So I don't think you have much to worry about. On the other hand, consulting a skilled bankruptcy lawyer in your locality will probably be worth the cost, just to be sure what practices obtain in your federal district. been established.
Answered on Sep 30th, 2015 at 12:19 PM
Mortgage companies have not been enforcing any clauses requiring payment in full when properties are transferred between spouses for many years now, and they do not require payment in full when a borrower files bankruptcy either.
Answered on Sep 30th, 2015 at 12:19 PM
Since you were the primary borrower on the first mortgage and a co-borrower on the small second, and since you have stayed current on your payments, it is unlikely that your ex-husband's bankruptcy will have any effect on your ability to refinance. You got the house in the divorce and now that you are remarried you are probably in a better position to refinance. As long as his name is no longer on the deed, you should not worry about it.
Answered on Sep 30th, 2015 at 5:06 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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It will depend on the language of the mortgage note and their policies. Generally the holders are happy as long as you are paying according to their terms. Keep current, the only real change is that he will be discharged on his liability on for the note.
Answered on Sep 30th, 2015 at 5:06 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Technically, the lender might have a right to call the second mortgage, it depends on which state you live in. However, lenders don't want to foreclose on loans, they want to get paid on the loans. I have never heard of a lender calling a loan where the payments are current. There is little chance that your loan will be called, however, you should contact the lender when your ex files because it can interfere with automatic payments.
Answered on Sep 30th, 2015 at 5:05 AM