Ex-in-laws (3rd party creditors) want to foreclose on my condo

[Scarlett]

[quote=bearishgurl][quote=frenchlambda]The problem is that at the time of divorce, there was only $10K of equity in the house (appraised value: $340K; balance on the loans: $330K). In other words, pretty much my entire contribution to the down-payment disappeared in the loss of value of the property after 5 years.
All that I got was the right to keep the little of equity in the condo.[/quote]

In essence, what you did here was agree to pay back the $200K (half of which was your ex’s debt) for $10K in “equity.” This is not even enough to pay a RE commission to a broker to sell it![/quote]

That’s how it seemed to me and doesn’t make any sense at all.

I say, let the condo go to foreclosure. Stop paying them. MUCH better to have a clean slate.

The child is very young, she will adapt easily and she will forget about it.

[frenchlambda]

Thanks bearishgurl, I appreciate the feedback.
You are right on a number of things.

Th only reasons I had mentioned the “stipulation and order” with a right to be reimbursed $85k from my ex-wife is to justify why I ended up signing the Deed of Trust.
These $85k are gone and I never counted on getting it back. It was money that disappeared in a bad investment (real estate). Yes if there was $100K of equity on the condo, I would probably get $85k back but it’s not the case.
And I am not going to fight with my ex-in-laws over this money. They operate as a bank. They gave us a loan the same way Bank of America gave us a loan. BofA doesn’t care about who paid what at the time of purchase.

It’s true that my ex doesn’t have a lot of assets. The only real assets are things (mostly land) that she inherited before even getting married.
She has been employed the whole time except when she was in rehab and right after she got off (about 4 months total).

I was able to trace part of the funds ($85k out of $100k) without any issue. This money was sitting in my bank account in France. Right before we closed escrow, I wired-transfer the full amount to my US account and then wire transfered it to escrow.
Anyway, that’s irrelevant.

Regarding the child custody situation, it is true that I could have gotten pretty much anything I wanted. I wanted to make things simple and easy. 50/50 seemed to be the best thing to do in the interest of my daughter, her mom and myself. No child support, no guilt, bitterness or frustration from either parent etc…
The child custody arrangements were based on the condition that my ex continue attending AA meetings daily and submit to random urine testing twice a month for a period of 1 year. Obviously if she drinks or get intoxicated again and puts my daughter in a dangerous situation the way she already did, all current arrangements can be reverted.

Your assumption about the in-laws getting involved at the last minute is correct. It was a distraction to me. It was also a way to punish me for keeping the condo. They seemed upset that I live in a nice 3-bdr condo while their daughter has to start from scratch and rents a 1-bdr apartment. They probably believe it’s unfair but again, it was my ex decision to move out of the community property. She even left her dog behind!

My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.

[frenchlambda]

Thanks bearishgurl, I appreciate the feedback.
You are right on a number of things.

Th only reasons I had mentioned the “stipulation and order” with a right to be reimbursed $85k from my ex-wife is to justify why I ended up signing the Deed of Trust.
These $85k are gone and I never counted on getting it back. It was money that disappeared in a bad investment (real estate). Yes if there was $100K of equity on the condo, I would probably get $85k back but it’s not the case.
And I am not going to fight with my ex-in-laws over this money. They operate as a bank. They gave us a loan the same way Bank of America gave us a loan. BofA doesn’t care about who paid what at the time of purchase.

It’s true that my ex doesn’t have a lot of assets. The only real assets are things (mostly land) that she inherited before even getting married.
She has been employed the whole time except when she was in rehab and right after she got off (about 4 months total).

I was able to trace part of the funds ($85k out of $100k) without any issue. This money was sitting in my bank account in France. Right before we closed escrow, I wired-transfer the full amount to my US account and then wire transfered it to escrow.
Anyway, that’s irrelevant.

Regarding the child custody situation, it is true that I could have gotten pretty much anything I wanted. I wanted to make things simple and easy. 50/50 seemed to be the best thing to do in the interest of my daughter, her mom and myself. No child support, no guilt, bitterness or frustration from either parent etc…
The child custody arrangements were based on the condition that my ex continue attending AA meetings daily and submit to random urine testing twice a month for a period of 1 year. Obviously if she drinks or get intoxicated again and puts my daughter in a dangerous situation the way she already did, all current arrangements can be reverted.

Your assumption about the in-laws getting involved at the last minute is correct. It was a distraction to me. It was also a way to punish me for keeping the condo. They seemed upset that I live in a nice 3-bdr condo while their daughter has to start from scratch and rents a 1-bdr apartment. They probably believe it’s unfair but again, it was my ex decision to move out of the community property. She even left her dog behind!

My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.

[frenchlambda]

Thanks bearishgurl, I appreciate the feedback.
You are right on a number of things.

Th only reasons I had mentioned the “stipulation and order” with a right to be reimbursed $85k from my ex-wife is to justify why I ended up signing the Deed of Trust.
These $85k are gone and I never counted on getting it back. It was money that disappeared in a bad investment (real estate). Yes if there was $100K of equity on the condo, I would probably get $85k back but it’s not the case.
And I am not going to fight with my ex-in-laws over this money. They operate as a bank. They gave us a loan the same way Bank of America gave us a loan. BofA doesn’t care about who paid what at the time of purchase.

It’s true that my ex doesn’t have a lot of assets. The only real assets are things (mostly land) that she inherited before even getting married.
She has been employed the whole time except when she was in rehab and right after she got off (about 4 months total).

I was able to trace part of the funds ($85k out of $100k) without any issue. This money was sitting in my bank account in France. Right before we closed escrow, I wired-transfer the full amount to my US account and then wire transfered it to escrow.
Anyway, that’s irrelevant.

Regarding the child custody situation, it is true that I could have gotten pretty much anything I wanted. I wanted to make things simple and easy. 50/50 seemed to be the best thing to do in the interest of my daughter, her mom and myself. No child support, no guilt, bitterness or frustration from either parent etc…
The child custody arrangements were based on the condition that my ex continue attending AA meetings daily and submit to random urine testing twice a month for a period of 1 year. Obviously if she drinks or get intoxicated again and puts my daughter in a dangerous situation the way she already did, all current arrangements can be reverted.

Your assumption about the in-laws getting involved at the last minute is correct. It was a distraction to me. It was also a way to punish me for keeping the condo. They seemed upset that I live in a nice 3-bdr condo while their daughter has to start from scratch and rents a 1-bdr apartment. They probably believe it’s unfair but again, it was my ex decision to move out of the community property. She even left her dog behind!

My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.

[frenchlambda]

Thanks bearishgurl, I appreciate the feedback.
You are right on a number of things.

Th only reasons I had mentioned the “stipulation and order” with a right to be reimbursed $85k from my ex-wife is to justify why I ended up signing the Deed of Trust.
These $85k are gone and I never counted on getting it back. It was money that disappeared in a bad investment (real estate). Yes if there was $100K of equity on the condo, I would probably get $85k back but it’s not the case.
And I am not going to fight with my ex-in-laws over this money. They operate as a bank. They gave us a loan the same way Bank of America gave us a loan. BofA doesn’t care about who paid what at the time of purchase.

It’s true that my ex doesn’t have a lot of assets. The only real assets are things (mostly land) that she inherited before even getting married.
She has been employed the whole time except when she was in rehab and right after she got off (about 4 months total).

I was able to trace part of the funds ($85k out of $100k) without any issue. This money was sitting in my bank account in France. Right before we closed escrow, I wired-transfer the full amount to my US account and then wire transfered it to escrow.
Anyway, that’s irrelevant.

Regarding the child custody situation, it is true that I could have gotten pretty much anything I wanted. I wanted to make things simple and easy. 50/50 seemed to be the best thing to do in the interest of my daughter, her mom and myself. No child support, no guilt, bitterness or frustration from either parent etc…
The child custody arrangements were based on the condition that my ex continue attending AA meetings daily and submit to random urine testing twice a month for a period of 1 year. Obviously if she drinks or get intoxicated again and puts my daughter in a dangerous situation the way she already did, all current arrangements can be reverted.

Your assumption about the in-laws getting involved at the last minute is correct. It was a distraction to me. It was also a way to punish me for keeping the condo. They seemed upset that I live in a nice 3-bdr condo while their daughter has to start from scratch and rents a 1-bdr apartment. They probably believe it’s unfair but again, it was my ex decision to move out of the community property. She even left her dog behind!

My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.

[frenchlambda]

Thanks bearishgurl, I appreciate the feedback.
You are right on a number of things.

Th only reasons I had mentioned the “stipulation and order” with a right to be reimbursed $85k from my ex-wife is to justify why I ended up signing the Deed of Trust.
These $85k are gone and I never counted on getting it back. It was money that disappeared in a bad investment (real estate). Yes if there was $100K of equity on the condo, I would probably get $85k back but it’s not the case.
And I am not going to fight with my ex-in-laws over this money. They operate as a bank. They gave us a loan the same way Bank of America gave us a loan. BofA doesn’t care about who paid what at the time of purchase.

It’s true that my ex doesn’t have a lot of assets. The only real assets are things (mostly land) that she inherited before even getting married.
She has been employed the whole time except when she was in rehab and right after she got off (about 4 months total).

I was able to trace part of the funds ($85k out of $100k) without any issue. This money was sitting in my bank account in France. Right before we closed escrow, I wired-transfer the full amount to my US account and then wire transfered it to escrow.
Anyway, that’s irrelevant.

Regarding the child custody situation, it is true that I could have gotten pretty much anything I wanted. I wanted to make things simple and easy. 50/50 seemed to be the best thing to do in the interest of my daughter, her mom and myself. No child support, no guilt, bitterness or frustration from either parent etc…
The child custody arrangements were based on the condition that my ex continue attending AA meetings daily and submit to random urine testing twice a month for a period of 1 year. Obviously if she drinks or get intoxicated again and puts my daughter in a dangerous situation the way she already did, all current arrangements can be reverted.

Your assumption about the in-laws getting involved at the last minute is correct. It was a distraction to me. It was also a way to punish me for keeping the condo. They seemed upset that I live in a nice 3-bdr condo while their daughter has to start from scratch and rents a 1-bdr apartment. They probably believe it’s unfair but again, it was my ex decision to move out of the community property. She even left her dog behind!

My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.

[ucodegen]

[quote frenchlambda]I used these $85K towards the down-payment for the property. Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.[/quote]
But the “marriage settlement” changes this.. to you getting all of the assets and liabilities out of the marriage (see what you wrote @ http://piggington.com/exinlaws_3rd_party_creditors_want_to_foreclosed_on_my_condo#comment-185278 under “COMMUNITY RESIDENCE” ). This means that if the above was the intent, then there was no purpose in the “stipulation and order” because the marriage settlement already took care of it and only caused you to sign away a right.

Husband shall be awarded, without offset, his separate, Wife’s separate and the community’s interest in the residence located at (address), subject to any and all encumbrances, including but not limited to the interest held by (ex-wife’s parents).

There was no purpose surrendering the deed of trust in order to get her signature.

During divorce, both parties share in the gain and any loss, adjusted for before marriage assets brought in from either side. The ex-in-laws loan was also not an arm-length transaction. Since you mentioned $85k as your 75% into the down from pre-marriage assets, that means that she brought in 25% or about $28K? The statement:

Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.

Usually gains are split evenly (California is a community property state) after pre-marriage contributed assets are subtracted. There is a more complicated way to do the divvying, but usually this would involve a pre-nup and valuating pre-marriage contributed assets over time, probably at an implied zero risk rate of return.

From a financial accounting point of view, pre-marriage assets contributed to a marriage are considered a liability as well as an asset. They have to be considered on dissolution of marriage. I am assuming that you bought the property originally for around $443K?
This means
assets = $443K (in property, form of condo)
liability = $28K(wife’s pre-marriage contrib) + $85K(husbands pre-marriage contrib) + $200K(from inlaws) + $130K(bank loan)

Property drops by $100K in value, meaning that you have a shared deficit of $100K. Split 50/50 means that you both have deficits of $50K each. Balancing that with the amount paid in from pre-marital assets, means that she is in negative territory to the tune of $50K-$28K or owes $22K. Your position ends up being $85K – $50K = $35K. Both of you lost $50K of asset value (shared loss – community property) when comparing pre and post marriage. This is basically the calc that would have been done if the property had been sold, and should have been done when dealing with the marriage settlement. (I initially thought the 85K was for something else, not related to property brought into the marriage.). NOTE: the cost of the divorce is also generally shared…

Now considering that it is all mostly water under the bridge because things have been signed, consider the above as educational material. Also: be careful of signing anything related to community property or disputed community property outside of the marriage settlement(As the “stipulation and order” and “deed of trust” did.)

There is an interesting quirk in the “stipulation and order” in that you may still have a right to have the $85K reimbursed. The way it was written does not tie it to the value of the property(condo), but from who? This is where an attorney might be useful. Oddly, you might be able to have the full amount assessed against the wife’s current assets and use that to reduce what is owed to the ex-in-laws (loan was not arms length). Does the “marriage settlement” mention anything with respect to this specific $85K? The only problem I see is the “without offset” in “Husband shall be awarded, without offset, his separate, Wife’s separate and..”. The whole thing seems quite messy in terms of the docs.. (gives me a queasy feeling. My German-Scottish background likes everything in order.)

** I wonder if anyone on this board knows a good attorney, particularly in the area of property, assets and marriage/divorce. An attorney needs to take a look at this mess (not one looking to charge as many hours as possible, or pad their hours). Maybe I am out of touch with today’s prices, but I don’t think frenchlambda got much for his $13K for restraining order and arbitrated divorce. The paperwork is too messy. If I am out of touch with today’s prices.. then I definitely went into the wrong field 8-P.

[ucodegen]

[quote frenchlambda]I used these $85K towards the down-payment for the property. Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.[/quote]
But the “marriage settlement” changes this.. to you getting all of the assets and liabilities out of the marriage (see what you wrote @ http://piggington.com/exinlaws_3rd_party_creditors_want_to_foreclosed_on_my_condo#comment-185278 under “COMMUNITY RESIDENCE” ). This means that if the above was the intent, then there was no purpose in the “stipulation and order” because the marriage settlement already took care of it and only caused you to sign away a right.

Husband shall be awarded, without offset, his separate, Wife’s separate and the community’s interest in the residence located at (address), subject to any and all encumbrances, including but not limited to the interest held by (ex-wife’s parents).

There was no purpose surrendering the deed of trust in order to get her signature.

During divorce, both parties share in the gain and any loss, adjusted for before marriage assets brought in from either side. The ex-in-laws loan was also not an arm-length transaction. Since you mentioned $85k as your 75% into the down from pre-marriage assets, that means that she brought in 25% or about $28K? The statement:

Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.

Usually gains are split evenly (California is a community property state) after pre-marriage contributed assets are subtracted. There is a more complicated way to do the divvying, but usually this would involve a pre-nup and valuating pre-marriage contributed assets over time, probably at an implied zero risk rate of return.

From a financial accounting point of view, pre-marriage assets contributed to a marriage are considered a liability as well as an asset. They have to be considered on dissolution of marriage. I am assuming that you bought the property originally for around $443K?
This means
assets = $443K (in property, form of condo)
liability = $28K(wife’s pre-marriage contrib) + $85K(husbands pre-marriage contrib) + $200K(from inlaws) + $130K(bank loan)

Property drops by $100K in value, meaning that you have a shared deficit of $100K. Split 50/50 means that you both have deficits of $50K each. Balancing that with the amount paid in from pre-marital assets, means that she is in negative territory to the tune of $50K-$28K or owes $22K. Your position ends up being $85K – $50K = $35K. Both of you lost $50K of asset value (shared loss – community property) when comparing pre and post marriage. This is basically the calc that would have been done if the property had been sold, and should have been done when dealing with the marriage settlement. (I initially thought the 85K was for something else, not related to property brought into the marriage.). NOTE: the cost of the divorce is also generally shared…

Now considering that it is all mostly water under the bridge because things have been signed, consider the above as educational material. Also: be careful of signing anything related to community property or disputed community property outside of the marriage settlement(As the “stipulation and order” and “deed of trust” did.)

There is an interesting quirk in the “stipulation and order” in that you may still have a right to have the $85K reimbursed. The way it was written does not tie it to the value of the property(condo), but from who? This is where an attorney might be useful. Oddly, you might be able to have the full amount assessed against the wife’s current assets and use that to reduce what is owed to the ex-in-laws (loan was not arms length). Does the “marriage settlement” mention anything with respect to this specific $85K? The only problem I see is the “without offset” in “Husband shall be awarded, without offset, his separate, Wife’s separate and..”. The whole thing seems quite messy in terms of the docs.. (gives me a queasy feeling. My German-Scottish background likes everything in order.)

** I wonder if anyone on this board knows a good attorney, particularly in the area of property, assets and marriage/divorce. An attorney needs to take a look at this mess (not one looking to charge as many hours as possible, or pad their hours). Maybe I am out of touch with today’s prices, but I don’t think frenchlambda got much for his $13K for restraining order and arbitrated divorce. The paperwork is too messy. If I am out of touch with today’s prices.. then I definitely went into the wrong field 8-P.

[ucodegen]

[quote frenchlambda]I used these $85K towards the down-payment for the property. Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.[/quote]
But the “marriage settlement” changes this.. to you getting all of the assets and liabilities out of the marriage (see what you wrote @ http://piggington.com/exinlaws_3rd_party_creditors_want_to_foreclosed_on_my_condo#comment-185278 under “COMMUNITY RESIDENCE” ). This means that if the above was the intent, then there was no purpose in the “stipulation and order” because the marriage settlement already took care of it and only caused you to sign away a right.

Husband shall be awarded, without offset, his separate, Wife’s separate and the community’s interest in the residence located at (address), subject to any and all encumbrances, including but not limited to the interest held by (ex-wife’s parents).

There was no purpose surrendering the deed of trust in order to get her signature.

During divorce, both parties share in the gain and any loss, adjusted for before marriage assets brought in from either side. The ex-in-laws loan was also not an arm-length transaction. Since you mentioned $85k as your 75% into the down from pre-marriage assets, that means that she brought in 25% or about $28K? The statement:

Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.

Usually gains are split evenly (California is a community property state) after pre-marriage contributed assets are subtracted. There is a more complicated way to do the divvying, but usually this would involve a pre-nup and valuating pre-marriage contributed assets over time, probably at an implied zero risk rate of return.

From a financial accounting point of view, pre-marriage assets contributed to a marriage are considered a liability as well as an asset. They have to be considered on dissolution of marriage. I am assuming that you bought the property originally for around $443K?
This means
assets = $443K (in property, form of condo)
liability = $28K(wife’s pre-marriage contrib) + $85K(husbands pre-marriage contrib) + $200K(from inlaws) + $130K(bank loan)

Property drops by $100K in value, meaning that you have a shared deficit of $100K. Split 50/50 means that you both have deficits of $50K each. Balancing that with the amount paid in from pre-marital assets, means that she is in negative territory to the tune of $50K-$28K or owes $22K. Your position ends up being $85K – $50K = $35K. Both of you lost $50K of asset value (shared loss – community property) when comparing pre and post marriage. This is basically the calc that would have been done if the property had been sold, and should have been done when dealing with the marriage settlement. (I initially thought the 85K was for something else, not related to property brought into the marriage.). NOTE: the cost of the divorce is also generally shared…

Now considering that it is all mostly water under the bridge because things have been signed, consider the above as educational material. Also: be careful of signing anything related to community property or disputed community property outside of the marriage settlement(As the “stipulation and order” and “deed of trust” did.)

There is an interesting quirk in the “stipulation and order” in that you may still have a right to have the $85K reimbursed. The way it was written does not tie it to the value of the property(condo), but from who? This is where an attorney might be useful. Oddly, you might be able to have the full amount assessed against the wife’s current assets and use that to reduce what is owed to the ex-in-laws (loan was not arms length). Does the “marriage settlement” mention anything with respect to this specific $85K? The only problem I see is the “without offset” in “Husband shall be awarded, without offset, his separate, Wife’s separate and..”. The whole thing seems quite messy in terms of the docs.. (gives me a queasy feeling. My German-Scottish background likes everything in order.)

** I wonder if anyone on this board knows a good attorney, particularly in the area of property, assets and marriage/divorce. An attorney needs to take a look at this mess (not one looking to charge as many hours as possible, or pad their hours). Maybe I am out of touch with today’s prices, but I don’t think frenchlambda got much for his $13K for restraining order and arbitrated divorce. The paperwork is too messy. If I am out of touch with today’s prices.. then I definitely went into the wrong field 8-P.

[ucodegen]

[quote frenchlambda]I used these $85K towards the down-payment for the property. Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.[/quote]
But the “marriage settlement” changes this.. to you getting all of the assets and liabilities out of the marriage (see what you wrote @ http://piggington.com/exinlaws_3rd_party_creditors_want_to_foreclosed_on_my_condo#comment-185278 under “COMMUNITY RESIDENCE” ). This means that if the above was the intent, then there was no purpose in the “stipulation and order” because the marriage settlement already took care of it and only caused you to sign away a right.

Husband shall be awarded, without offset, his separate, Wife’s separate and the community’s interest in the residence located at (address), subject to any and all encumbrances, including but not limited to the interest held by (ex-wife’s parents).

There was no purpose surrendering the deed of trust in order to get her signature.

During divorce, both parties share in the gain and any loss, adjusted for before marriage assets brought in from either side. The ex-in-laws loan was also not an arm-length transaction. Since you mentioned $85k as your 75% into the down from pre-marriage assets, that means that she brought in 25% or about $28K? The statement:

Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.

Usually gains are split evenly (California is a community property state) after pre-marriage contributed assets are subtracted. There is a more complicated way to do the divvying, but usually this would involve a pre-nup and valuating pre-marriage contributed assets over time, probably at an implied zero risk rate of return.

From a financial accounting point of view, pre-marriage assets contributed to a marriage are considered a liability as well as an asset. They have to be considered on dissolution of marriage. I am assuming that you bought the property originally for around $443K?
This means
assets = $443K (in property, form of condo)
liability = $28K(wife’s pre-marriage contrib) + $85K(husbands pre-marriage contrib) + $200K(from inlaws) + $130K(bank loan)

Property drops by $100K in value, meaning that you have a shared deficit of $100K. Split 50/50 means that you both have deficits of $50K each. Balancing that with the amount paid in from pre-marital assets, means that she is in negative territory to the tune of $50K-$28K or owes $22K. Your position ends up being $85K – $50K = $35K. Both of you lost $50K of asset value (shared loss – community property) when comparing pre and post marriage. This is basically the calc that would have been done if the property had been sold, and should have been done when dealing with the marriage settlement. (I initially thought the 85K was for something else, not related to property brought into the marriage.). NOTE: the cost of the divorce is also generally shared…

Now considering that it is all mostly water under the bridge because things have been signed, consider the above as educational material. Also: be careful of signing anything related to community property or disputed community property outside of the marriage settlement(As the “stipulation and order” and “deed of trust” did.)

There is an interesting quirk in the “stipulation and order” in that you may still have a right to have the $85K reimbursed. The way it was written does not tie it to the value of the property(condo), but from who? This is where an attorney might be useful. Oddly, you might be able to have the full amount assessed against the wife’s current assets and use that to reduce what is owed to the ex-in-laws (loan was not arms length). Does the “marriage settlement” mention anything with respect to this specific $85K? The only problem I see is the “without offset” in “Husband shall be awarded, without offset, his separate, Wife’s separate and..”. The whole thing seems quite messy in terms of the docs.. (gives me a queasy feeling. My German-Scottish background likes everything in order.)

** I wonder if anyone on this board knows a good attorney, particularly in the area of property, assets and marriage/divorce. An attorney needs to take a look at this mess (not one looking to charge as many hours as possible, or pad their hours). Maybe I am out of touch with today’s prices, but I don’t think frenchlambda got much for his $13K for restraining order and arbitrated divorce. The paperwork is too messy. If I am out of touch with today’s prices.. then I definitely went into the wrong field 8-P.

[ucodegen]

[quote frenchlambda]I used these $85K towards the down-payment for the property. Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.[/quote]
But the “marriage settlement” changes this.. to you getting all of the assets and liabilities out of the marriage (see what you wrote @ http://piggington.com/exinlaws_3rd_party_creditors_want_to_foreclosed_on_my_condo#comment-185278 under “COMMUNITY RESIDENCE” ). This means that if the above was the intent, then there was no purpose in the “stipulation and order” because the marriage settlement already took care of it and only caused you to sign away a right.

Husband shall be awarded, without offset, his separate, Wife’s separate and the community’s interest in the residence located at (address), subject to any and all encumbrances, including but not limited to the interest held by (ex-wife’s parents).

There was no purpose surrendering the deed of trust in order to get her signature.

During divorce, both parties share in the gain and any loss, adjusted for before marriage assets brought in from either side. The ex-in-laws loan was also not an arm-length transaction. Since you mentioned $85k as your 75% into the down from pre-marriage assets, that means that she brought in 25% or about $28K? The statement:

Since 75% of the total down-payment came from money I had acquired outside the marriage, it is my understanding that I would get 75% of whatever equity was in the house at the time of dissolution.

Usually gains are split evenly (California is a community property state) after pre-marriage contributed assets are subtracted. There is a more complicated way to do the divvying, but usually this would involve a pre-nup and valuating pre-marriage contributed assets over time, probably at an implied zero risk rate of return.

From a financial accounting point of view, pre-marriage assets contributed to a marriage are considered a liability as well as an asset. They have to be considered on dissolution of marriage. I am assuming that you bought the property originally for around $443K?
This means
assets = $443K (in property, form of condo)
liability = $28K(wife’s pre-marriage contrib) + $85K(husbands pre-marriage contrib) + $200K(from inlaws) + $130K(bank loan)

Property drops by $100K in value, meaning that you have a shared deficit of $100K. Split 50/50 means that you both have deficits of $50K each. Balancing that with the amount paid in from pre-marital assets, means that she is in negative territory to the tune of $50K-$28K or owes $22K. Your position ends up being $85K – $50K = $35K. Both of you lost $50K of asset value (shared loss – community property) when comparing pre and post marriage. This is basically the calc that would have been done if the property had been sold, and should have been done when dealing with the marriage settlement. (I initially thought the 85K was for something else, not related to property brought into the marriage.). NOTE: the cost of the divorce is also generally shared…

Now considering that it is all mostly water under the bridge because things have been signed, consider the above as educational material. Also: be careful of signing anything related to community property or disputed community property outside of the marriage settlement(As the “stipulation and order” and “deed of trust” did.)

There is an interesting quirk in the “stipulation and order” in that you may still have a right to have the $85K reimbursed. The way it was written does not tie it to the value of the property(condo), but from who? This is where an attorney might be useful. Oddly, you might be able to have the full amount assessed against the wife’s current assets and use that to reduce what is owed to the ex-in-laws (loan was not arms length). Does the “marriage settlement” mention anything with respect to this specific $85K? The only problem I see is the “without offset” in “Husband shall be awarded, without offset, his separate, Wife’s separate and..”. The whole thing seems quite messy in terms of the docs.. (gives me a queasy feeling. My German-Scottish background likes everything in order.)

** I wonder if anyone on this board knows a good attorney, particularly in the area of property, assets and marriage/divorce. An attorney needs to take a look at this mess (not one looking to charge as many hours as possible, or pad their hours). Maybe I am out of touch with today’s prices, but I don’t think frenchlambda got much for his $13K for restraining order and arbitrated divorce. The paperwork is too messy. If I am out of touch with today’s prices.. then I definitely went into the wrong field 8-P.

[bearishgurl]

[quote=frenchlambda]…My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.[/quote]

frenchlambda, if you currently owe $330K on the condo and it is only worth $340K, I don’t see how you can successfully refinance. Your condo would have to be worth $412,500 in order to qualify it for a $330K loan at 80% LTV. It could be several years (if at all) before this happens.

edit: Therefore, you will have to bring another $72,500 (+ closing costs) of your OWN money to the table to make a refinance happen.

[bearishgurl]

[quote=frenchlambda]…My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.[/quote]

frenchlambda, if you currently owe $330K on the condo and it is only worth $340K, I don’t see how you can successfully refinance. Your condo would have to be worth $412,500 in order to qualify it for a $330K loan at 80% LTV. It could be several years (if at all) before this happens.

edit: Therefore, you will have to bring another $72,500 (+ closing costs) of your OWN money to the table to make a refinance happen.

[bearishgurl]

[quote=frenchlambda]…My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.[/quote]

frenchlambda, if you currently owe $330K on the condo and it is only worth $340K, I don’t see how you can successfully refinance. Your condo would have to be worth $412,500 in order to qualify it for a $330K loan at 80% LTV. It could be several years (if at all) before this happens.

edit: Therefore, you will have to bring another $72,500 (+ closing costs) of your OWN money to the table to make a refinance happen.

[bearishgurl]

[quote=frenchlambda]…My goal is to keep to the place and refinance. It is doable in my opinion. I do not want to go into foreclosure. I also want to be financially detached from my ex-in-laws. I really don’t want to have anything to do with them anymore but I can live with continuing to pay them for another 2 years.[/quote]

frenchlambda, if you currently owe $330K on the condo and it is only worth $340K, I don’t see how you can successfully refinance. Your condo would have to be worth $412,500 in order to qualify it for a $330K loan at 80% LTV. It could be several years (if at all) before this happens.

edit: Therefore, you will have to bring another $72,500 (+ closing costs) of your OWN money to the table to make a refinance happen.

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