Legal Question in Real Estate Law in California
Forced Sale Situation
Repost with more info. My Fiancee who I bought a house with is ending the relationship (she has been cheating and now she has a boyfriend). In the meantime the housing marking has gone down and we can't sell the house without taking a big hit.
Here are some of the options that I know of. I want to validate if my assumptions are correct and if there is a better course of action. So far it seems like any of these options are a loosing proposition for me and I would like to walk out of this with minimal financial damage.
1 - I can buy her out. She can sign a quit claim on the title and she is ready to let go off her equity. We bought it as tenants in common with 20% downpayment and we shared the downpayment 50-50. In this situation, I will also have to take her name off the mortgage and refinance in my own name. But since the value of the house has gone down, it will have to be refinanced at present value (?), and I would have to not only loose my orginal downpayment equity (on paper at least), I will also have to fork up another 20% for this new refinanced loan. For example, if we bought the house at 620K and owe 500 and the present market value is 520. Then it wo
1 Answer from Attorneys
Re: Forced Sale Situation
You seem to have been cut off in mid-essay by LawGuru's question-length limit. I don't know what the other two options you had in mind were - perhaps they included her buying you out, defaulting and allowing a foreclosure to occur, restructuring the existing loan, bankruptcy, renting the property, or something else. You never got around to mentioning whether you live there now, but I figure you probably do; if so, a question remains as to whether you like the place or whether it will have bad memories for you.
Other possibilities that belong on your list include getting a roommate to pay part of the carrying costs, and negotiating with the present lender to re-write the loan to remove the ex-fiancee and make you the sole borrower at the same time you become the sole owner (avoiding the need to refinance). I would at the same time try to get a cash settlement from her for your assumption of the full debt burden at a time when there is little or no equity in the property.
Your choice will be heavily economics-driven and does not raise so much of a legal issue as it does one of economic common sense, so financial analysis including an appraisal and lender proposals may drive your rational choice more than law......also think about your personal situation and where you want to be two or ten years from now.
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