Expert: Dick Dennis - 7/20/2008

Question
Hi
My home is already in default. I'm in the process of going through a divorce. The home loan (Chase) is in my name and the house deed is both mine and my soon to be ex wife. However, we have a HELOC (Countrywide)in both our names. My ex-wife and I agreed to continue do pay on our second, so it doesn't ruin her credit. What happens with our second mortgage if we continue to make my payments on it and our first is sold in an auction?  Should we notify Countrywide telling them that we are willing to continue to pay them off? Also, should my soon to be ex wife file a quick claim deed? any advice would help thanks.

Answer
The way I see it, Mark, is as long as the HELOC is NOT a lien on your house then you can continue to make the payments on it to save the credit of your wife. If it is a lien on your house, it is going to be wiped out by the foreclosure of the first trust deed (mortgage). That will definitely affect your wife's credit unless you go to Countrywide (now Bank of America) and say you intend to continue paying on it (reaffirming) while you lose the house. Yes, it would be a good idea for your wife to file a quit-claim deed to you. However, everything I say here should be corroborated by your divorce attorney AND a real estate attorney to make sure you doing everything that is best for BOTH of your interests. The attorney may indeed suggest other and better ideas that you should do. I do wish you well.

Dick Dennis