The Pre Foreclosure Property Investor Kit
I have a property deeded to myself and 2 other people as follows: My
sister(25%), her ex-husband (25%), and I (50%) are all on a deed to a
house in Florida. My sister and her ex husband have a mortgage. The
divorce decree specifically states that the ex husband is to pay the
mortgage. He has not for the past 3 months and now the house is in
pre-foreclosure. I have secured financing to buy out his debit but
can't do that without his cooperation. We offered to pay his debt,
remove him from the deed, and let him walk away, but he refused and is
now threatening bankruptcy. As I understand it, IF he did file for
Chapter 7 my sister could petition the bankruptcy judge to not
discharge the mortgage payment because it was part of the divorce
decree [11 U.S.C. sec. 523(a)(15)]. We are going to petition the
court that he is in contempt, as he has not held up his part of the
divorce. Is there a way to force a sale to us or to get him off the
deed? If this does go to foreclosure, can I buy the property from the
bank before it is auctioned off? I am not on their mortgage at all.
Does anyone know or have suggestions on how I can get this property
back from foreclosure proceedings if they continue? I realize that it
will go up for auction on the courthouse steps and I'm afraid that an
investor with a lot of money will outbid me (property value is $280k,
equity is $168k, leaving a $118k debit). Basically I am wondering what
options I have to remove him from the equation legally.
1. The ex-wife could sue the ex-husband for breach of the decree.
Settlement of that lawsuit might be as simple as a quit claim deed.
2. You can always prevent a foreclosure by making the payments.
3. If the debt is discharged in BK, his interest in the property will be
part of the BK estate (unless it's an exempt asset). If his interest in the
property is part of the BK estate, the trustee will consider an offer from
you and/or the ex-wife to buy that interest and will present that offer to
the court for approval. The 25% interest will not be marketable to anyone
else, so you and/or the ex-wife should be able to buy it out of the BK
estate cheaply.
4. You could file an action for partition. That means you are asking the
court to order the property sold and the proceeds divided. That would be
accomplished by an auction, at which you would bid, using pre-approved
mortgage financing.
5. The ex-wife could file a motion in the family court for a modification
of the decree. What she would be asking for is that the ex-husband's
interest in the property be transferred to her as compensation for his not
making the payments as ordered.
6. It's important that whatever option you decide on be handled by an
attorney. This is not one of those areas where people can reasonably expect
to do it themselves successfully.