Divorce, Forclosure and an 80/20 loan...Advice?

[inseriousdebt]

I am so new to all of this, but I am currently going through a divorce....and I am going to have to give the house up. I am upside down on it and it of course has my ex's name and mine still on the mortgages. We have an 80/20 loan on the house. I am wondering how this works...I am not filing for bankruptcy, and I am wondering if I will be left to pay anything after this is all done because it is an 80/20? I am new to all of this and really need some help! Any advice is appreciated! Thank you.

[StartingOver08]

Welcome to the forum!

If you could clarify your post a little, maybe we can help you formulate a plan. You are taking on two very large problems: divorce and foreclosure.

First, in which state do you reside?

What is the actual current market value of your home if you sold it within the next 30 to 60 days? What are the mortgage amounts?

What is your income? Do you have other debt or is the mortgage debt your only debt? I'm not sure what you mean by"and I am wondering if I will be left to pay anything after this is all done because it is an 80/20?"

[kjd1231]

You would likely be better off with a short sale if you do not plan to file bk.

[hereforinfo]

You would likely be better off with a short sale if you do not plan to file bk.

Not necessarily. The forgiven amount may or may not be considered taxable income. It would probably fall under the mortgage debt forgiveness act as long as it's your primary residence (any cash out or heloc funds that were used other than for the purchase or improvement of the property are not eligible and would most likely be taxable). The problem with a short sale is that it is a lot of hassle and only a small percentage of them actually make it to closing, even after the bank's approval. With an 80/20 loan, the bank most likely had mortgage insurance (even if the borrower didn't pay pmi) and would rather foreclose and collect the insurance. Plus the second mortgage would have to agree to extinguish their lien for pennies on the dollar. The short sale is definitely worth a try if you can make it happen, but just know going into it that it's a long shot and there could be other financial repercussions.

[bulletproof77]

my sympathies....

Just went through divorce, foreclosure and a Chapter 7 BK....it's not easy. Consult a good attorney and hope for the best.

[Anna118]

I was in a similar situation. I was in a tight spot, fearing the worse and after doing some research and talking to my lender I’m going to be fine. I feel like a ton of bricks have been lifted off my shoulders! All I can say is talk to your lender.. I think its so important to have that open line of communication. I was lucky and they worked with me so I didn't lose my house. Here is a graphic that says it all….http://www.typobounty.com/Funny/Foreclosure.htm