Plummeting housing prices have been in the news for years in Texas and elsewhere. Some markets crashed earlier and deeper, but the depressed housing market has affected almost every state’s mortgage rates. As a result, many homeowners now owe more money than their homes are worth. Divorce is often complex, and this new trend is making property division even more complicated in many places.
Unfortunately, many homeowners may not be able to pay off their mortgage, and no one knows exactly how many homeowners are in this position. However, some of these homeowners want to divorce, making the situation vastly more complicated.
But with negative equity, it is becoming a much bigger challenge. Negotiation may need to be made with the lenders, and when this is not an option, they may need to agree to keep the property after the divorce. Negotiation may then be needed to decide who pays what portion of the continuing loan payments. Decisions will need to be made on who is responsible for continued repairs, and when they will be made.
Divorce can be a stressful and emotionally challenging experience even when negative equity is not an issue. Many might feel overwhelmed and delay taking action, which could be troublesome when the relationship has become toxic to the whole family. Texas couples who are seeking or considering divorce may find it beneficial to seek the help of professionals who have experience in dealing with these matters. Their expertise could provide useful guidance around untangling often complicated problems.
Source: NV Business Weekly, “Divorcing couples struggle with negative equity in their homes,” John Seelmeyer, Jan. 31, 2012