Decree Wording Helps Ex-wife Get New Home Loan

By Christopher Combs | October 4, 2015

  Question:  In a recent column you said that an ex-wife would not be able to qualify for a mortgage loan for a new home in Chandler, even though the ex-husband in the divorce decree was awarded the family home and agreed to be 100 percent responsible for the mortgage loan on the family home.  Under similar circumstances, however, I was able to qualify for a mortgage loan to buy a new home.  My mortgage lender used similar language in my divorce decree to remove any liability for the old mortgage loan from my credit reports.  Just thought that you…


Woman Stuck on Mortgage Despite Divorce

By Christopher Combs | April 5, 2015

  Question:  Under the terms of my divorce decree last year my ex-husband was awarded title to our Gilbert home.  He was required to pay the mortgage payments on our home.  I even signed a quit claim deed for our home to my ex-husband.  The problem is that when I recently applied for a loan to buy a car, I was turned down by the bank because the mortgage on our home is still shown as my obligation on my credit history.  My ex-husband does not want to sell the home at this time, and because of his poor credit…


Foreclosure Sale Likely Means Home Reverts to Original Owner

By Christopher Combs | February 15, 2015

  Question:  I sold my Chandler home five years ago for $75,000.  The buyers made a $25,000 down payment and I financed the buyers with a $50,000 “seller-carry-back” loan, i.e., the buyers agreed to pay me $50,000 in monthly payments over ten years at 12% interest.  The buyers are now going through a divorce and eight months ago stopped making the monthly payments.   My title company has now scheduled a foreclosure sale in approximately 90 days.  Will this foreclosure sale be a silent auction or will potential buyers bid against each other?  Who will own this home if no…


Arizona Prefers Deeds of Trust Over Mortgages for Home Loans

By Christopher Combs | February 1, 2015

  Question:  In Arizona a deed of trust is used rather than a mortgage for a loan secured by a home or other real property.  Other states, such as our home state of Massachusetts, use mortgages rather than deeds of trust.  Is there an Arizona law that only deeds of trust must be used?   Answer: No.  Arizona law provides for mortgages, and since 1971 Arizona law also provides for deeds of trust.  Most mortgage lenders, however, prefer deeds of trust for several reasons.   One, a mortgage can only be foreclosed judicially by court proceedings, i.e., judicial foreclosure sale,…


Prepayment Penalty Often Enforceable

By Christopher Combs | September 28, 2014

  Question:  When we refinanced the $220,000 mortgage loan on our Phoenix home, the mortgage lender charged a 3 percent prepayment penalty of $6,600 to pay off this mortgage loan.  Can a lender charge a prepayment penalty without showing that they lost money or some other reason?  Are we entitled to an income tax deduction of $6,600 for this penalty?   Answer:  The amount of any prepayment penalty is established by a clause in the loan documentation (the “note”), and is generally enforceable.  Most mortgage lenders will enforce a prepayment penalty clause when a borrower refinances the mortgage loan with…


Judgments Won't Scuttle Loan in Arizona

By Christopher Combs | September 7, 2014

  Question: I have lived in my home in Chandler for more than 10 years and have established good credit. There is another individual in Apache Junction with my exact same name (even the same middle initial) who has caused me problems because he has very bad credit, including several judgments by credit-card companies. I want to purchase a newer home in Chandler, and my mortgage broker said that the credit problems of this other individual with my same name should not be a problem. In other words, I will not have to prove that I am not the individual…


Foreclosure and Your Taxes

By Christopher Combs | May 4, 2014

  Question:  We bought our home in a new Gilbert subdivision six years ago.  Although there has been some appreciation lately, our home is worth only $260,000.  We still owe $380,000 on the mortgage.  After my husband lost his job last year, we finally had to stop making payments, and the foreclosure occurred this February.  Our accountant now says that we could have income tax liability for the $120,000 difference between the amount of our mortgage ($380,000) and the value of our home ($260,000) at the time of the foreclosure.  Many of our neighbors in our subdivision have lost their…