Understanding the Division of Home Equity in Divorce

In recent decades, the family home acted as a marital investment. In today's world, the family home may be a financial anchor and another marital debt that must be dealt with before the divorce can be finalized. In Florida in particular, many divorcing couples owe more on their homes than the homes will sell for.

At the Law Office of Amy L. Beauchaine, attorney Beauchaine has been helping couples divide their marital assets and debts, including real estate division, since 2000. As a family law attorney, she has experience with high asset divorces and complex property divisions, as well as more straightforward divisions of property.

Short Sale Options for Underwater Mortgages

When a married couple owes more on a home than it is worth, the mortgage is said to be underwater. When this couple divorces, there are four primary options:

  • One spouse remains in the home (perhaps the home will increase in value at a later date).
  • The spouses let the home go into foreclosure and walk away (with negative ramifications on their credit ratings).
  • The spouses declare bankruptcy and the mortgage debt is eliminated (with negative ramifications on credit ratings for years).
  • In a short sale, the spouses sell the home for less than the amount owed on the mortgage

A short sale is not without risk. The mortgage lender may ask the borrowers to sign a promissory note in which they promise to pay back the "short" amount. At other times, the short sale may satisfy the original mortgage lender, but not that of a second mortgage lender. The mortgage company may also go after the leftover debt, or "deficiency," at a later date. In fact, the mortgage lender can come after either spouse for up to 20 years.

For a great many reasons, an experienced family law attorney is a wise idea when dividing the marital assets and debts, including the home equity.

Contact Us for Help Moving Your Family Forward

To get you and your family moving on a path toward a brighter future, please contact the Altamonte Springs Law Office of Amy L. Beauchaine at 407-636-2985 or send our post-divorce modification lawyer and Orlando divorce and property division attorney an email.