I am divorced and now how can we settle the house which is underwater?

You got divorced without addressing the joint property?  You can ask her to sign a quit claim deed to transfer her title to you, but if her name is on the mortgage this will not help.  You ordinarily cannot remove her name from the mortgage without refinancing the property. This answer is given in accordance with the laws of Virginia and may not be applicable in any other state.  It should not be construed as legal advice, as that would require a more thorough analysis of all of the facts involved in a specific case.  If you need further information or assistance, please feel free to contact my office for a consultation. Case results depend upon a variety of factors unique to each case. Case results do not guarantee or predict a similar result in any future case.