Refinance vs foreclosure of ex’s house?
Long story, please take the time to read.
My ex-husband and I have a home mortgaged in both of our names. We have been divorced for five years, but he is unable (or unwilling) to refinance the home on his own (or with his new wife he married in March). On Friday the wife called me and said that they were contacted by someone who could help them lower the house payments by re-modifying the mortgage to give them a lower interest rate. They were contacted because he has been late on the payments and is a few months behind. The only catch is that I would have to sign the re-modification papers with him. The wife said that if I don’t sign these papers, he will have to file for bankruptcy. Then he will keep the house anyways because it is his primary place of residence and the courts will lower the payments to something that he can afford.
The thing is, we just signed re-modification papers is November to put the unpaid past due balance back onto the principle so that he would be considered current on the mortgage. And before that in February of last year I loaned him $ 1400 to help him get current and pay past due payments. When I gave him the money in February, I thought that it would be the end of it, then I found out in September that he had had some kind of surgery and had missed some payments because he had to miss work. So that is when I agreed to sign the re-mod to get him back out of the negative. I thought that when I signed the papers that that would be the end of it. Now here it is only six months later and he still can’t make the payments (they are about $ 730/month now).
I have done everything I can to try and help him keep this house. He doesn’t want to loose the house, but I don’t think he should keep it if he can’t afford it.
I am not unwilling to sign the re-mod, but how is this going to look on my credit when I go to but a home for my family? I currently live with my husband and three children in my father-in-law’s house, rent free. I have all three children (6 year old girl, 3 year old boy, and 4 month old boy) in one room. I was planning on buying a house sometime in the next year. My current husband’s credit is not going to help since he filed bankruptcy and has a home foreclosure on his credit from his divorce in 2004.
The best solution in my opinion would be for my ex and his wife to refinance the home and get my name off of it all together, but she has bad credit (from her previous marriage) and an unstable work history (she won’t keep a job).
So my question basically is: Which is better? Having a mortgage already on my credit (one that may be delinquent), or having a foreclosure? Should I sign the re-modification papers or not?