Divorcing homeowners can take steps to avoid mortgage problems
When a married couple splits up, it's usually best to divorce themselves from their existing mortgage, too.
Q. My wife and I are getting divorced, and I have agreed to quitclaim my half-interest in our longtime home to her as part of our preliminary divorce settlement so she can continue living there. The settlement states that she will be responsible for making all future payments on the mortgage that we jointly took out several years ago. Will signing the divorce settlement and quitclaim also automatically remove me from the obligation to make the payments if she doesn't make them herself?A. No. The mortgage that the two of you acquired years ago obviously preceded your pending divorce, so merely signing a quitclaim deed and then a divorce-settlement agreement promising that your wife will make all future loan payments won't release you from the legal obligation that you personally accepted when the mortgage was first issued.In a "worst-case scenario," the lender could seize your other assets and garnish your wages if your ex-wife defaults on the mortgage that the two of you have now - and you would have little legal recourse against her, because the quitclaim gave her a 100-percent interest in the house. You would then be stuck with payments on a home that you no longer own, and your credit rating could go down the tubes if the lender must foreclose.Have the current draft of the divorce settlement amended to state that your wife immediately will refinance the property in her name only. This would pay off the loan you jointly took out several years ago, and relieve you of the legal obligation to make any payments on the new mortgage in the future (assuming you don't agree to cosign her application). The quitclaim could be signed as part of the refinancing process.Talk to a lawyer for details. Also consider an easier option: If you can get your spouse to agree, the home could simply be sold now and the proceeds distributed as the two of you wish.Q. I grew up in the 1950s when no one had even seen or heard of a condominium. Now I have retired and moved to Florida, and they seem to be all over the place. When was the first condominium built?A. The first condo project built in the U.S. was The Greystoke, which opened in Utah in 1962, according to the American Bar Association. It probably wouldn't have been constructed at all if the Federal Housing Administration had not earlier agreed to start insuring loans for condo buyers based on legal statutes that were developed in Puerto Rico in the late 1950s.After a slow start in the '60s, the condo concept gained steam across America, largely because land available to build single-family homes was starting to run short in many areas and house prices kept climbing. Millions of people who wanted to own a one-family house couldn't afford it, so developers filled the gap by offering less-expensive condominiums and townhouses that had shared walls and yards instead.Though the idea of "going condo" is relatively new to North America, it was born about 1,000 years ago. That's when a small group of shopkeepers in Germany devised a condominium-type plan that allowed each of them to own an individual floor in a multilevel building.Q. We listed our home for sale in February for $227,000, and a woman offered $210,000 for it. Our agent gave her a written counteroffer for $221,000, but she never responded. We signed a contract to sell the house to a married couple for $223,000 two weeks ago, but now the first woman has called us back to say she is accepting our original counteroffer for $221,000 and that she'll sue if we don't sell it to her. What can we do?A. Don't worry. If the counteroffer your agent presented to the woman was on a standard realty form, it included a time-is-of-the-essence clause that required her to either accept or reject your counteroffer within a specified period of time. The typical clause demands a prospective buyer's response within 48 to 72 hours. If the buyer doesn't make a written decision to accept or reject in the allotted time, the counteroffer is automatically voided and the homeowner becomes free to sell the home to someone else.Check the copy of the counteroffer your agent presented to the woman in February. If it includes such a clause, you have nothing to worry about. But even if it doesn't, it's unlikely that her threatened lawsuit to force a sale would win, because it would cause undue hardship to both you and the new buyers.Your letter, though, serves as a reminder that buyers and sellers alike should always put a time limit on their offers and counteroffers. Doing so prompts each party to make a decision quickly and can help avoid problems several weeks (or months) later.bull; For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.#169; 2010, Cowles Syndicate Inc.