Michigan Military Divorce

Second mortgages complicate property settlements

Divorce and property settlements are so much more difficult to negotiate in these troubled financial times. Many married couples have real estate that is "under water" (worth less than the indebtedness), or in foreclosure, or have not just a mortgage but also a home equity loan or two.

The Washington Post focuses on whether there's any help down the road for those saddled with second mortgages.

Read "Second mortgages complicate efforts to help homeowners" here. March 27, 2010 (free)

Additional Washington Times content: 

Obama administration revises anti-foreclosure strategy

Information on Foreclosure Prevention Program

$19 million in divorce attorney fees . . . and counting?

Good grief! A divorce with $19 million dollars in attorney fees? According to
the  LA Times, the divorce between the Dodgers' owner Frank McCourt and his wife Jamie McCourt has already cost that much and the parties haven't even had a trial yet! Teams of lawyers and accountants are working on the case.

According to the Times:

Joint Custody of Fido | Worth $40,000?

Yesterday in Salem, N.J, a judge ordered a former couple to share custody of Dexter, after the pair paid lawyers $40,000 in their contest for custody. Fox TV reports that one “parent” isn’t happy with a judge’s custody decision and may appeal.

Judge John Tomasello said Doreen Houseman and Eric Dare, cohabitants who lived together for 13 years but never married and broke up in 2006, must share equal custody of the dog. Dare told reporters he may appeal the decision.

Dexter was earlier declared to be the parties' joint property. Therefore, a suitable custody arrangement had to be determined. That judge said that there were three options: one or the other “parent” could get full custody or a joint visitation agreement can be decided.

Change life insurance beneficiary after divorce

Another case has been decided by the Michigan court of appeals dealing with a challenge to a life insurance policy payout to the divorced spouse because the former spouse forgot to change his beneficiary after the divorce. In Brown v Wright, the judgment of divorce had the standard statutory provision: "Any of the rights of either party in any policy or contract of life, endowment or any insurance of the other as beneficiary or otherwise, is hereby extinguished unless specifically preserved by this Judgment."

Divorce and distribution of real estate interests

On July 11, 2009, the New York Times reports that tight mortgage rules exclude even good risks. This is not good news for family lawyers and their clients, no matter where they reside. Michigan, of course, has been hit hard by the worsening economy because of the dependence upon the auto industry. The economy impacts child custody issues (re-locations because of availability of work in another area) and property distribution.

Yes, everyone will tell you that this is a “buyer’s market.” Someone wanting to purchase a home who doesn’t have a home they need to unload first is in a unique and enviable position – usually. Today's Times article, however, described a buyer – a recent dental school graduate – who was not qualified by lenders to purchase a condo despite a good credit rating, a hefty down payment, and a current six-figure income. Why? Because she couldn’t show two years of tax returns with good income numbers since she was in graduate school until recently!

Foreclosure specialists capitalizing on homeowners' misfortunes?

Recently on the Family Law Listserv participants discussed how long people can remain rent-free in their homes after foreclosure. The length of time varies from one property to the next, depending upon the amount of acreage and, often, contractual issues. However, an important aspect of this is  that the owners must actually be residing in the home. A bank can take possession immediately if the homeowner abandons the property. An article in the New York Times today describes techniques foreclosure specialists are touting and using to evict residents who try to stay in bank-owned property, a process they call “cash for keys.”

A recent convention of real estate agents and property managers in Palm Desert, California attracted about 3,000 attendees of people cashing in on the boom in foreclosed properties. Reomac is the industry group that serves the mortgage default trade, specializing in selling the busted-up American dream.

According to one attendee, their business is booming, and they call it the "R.E.O. tsunami" which has flood the market with as many as 700,000 bank properties nationwide. Although the tide has been stemmed in recent months because of foreclosure moratoriums imposed by major banks and the Obama administration, opinion expressed at the conference is that real estate agents shouldn't worry because the flood probably has not reached its peak, but will likely continue for several more years.

This is bad news for homeowners in foreclosure and also for homeowners who wish to sell their homes because of relocations as they are transferred by their employers to other parts of the country or have accepted employment in other states after plant closures or a loss of employment.

Frankly, the gloating and seemingly insincere comments about how these R.E.O. agents don't want to profit from other peoples' misfortunes - offered up over drinks and caviar at poolside parties - ring false. This is especially true when in the next breath the speaker says there isn't enough inventory of distressed properties. This is a mess that makes divorce and separation all the more difficult and a family lawyer's task in guiding the client even more dicey.  

You may read the New York Times article, Homeowners’ Hard Times Are Good for the Foreclosure Business here.

Your client’s money | New mortgages & re-financing

On April 4th, the New York Times featured an article focusing on the difficulties of working with a mortgage broker. Since many family lawyers today have clients whose houses are “upside down” (have greater debt than appraised value), I want to provide a link to the Times article for you to give your clients.

According to Ron Lieber writing for the Times, some of the biggest companies in real estate have recently decided to stop working with brokers. He says that "Chase won’t lend to brokers’ clients anymore" and that “the PMI Group, one of the biggest companies in the mortgage insurance business, flat out refuses to underwrite any policies on loans that started with a broker.”

Joint debt | Disabling use of vehicle when ex won't pay as ordered

On March 25th, Jonathan Welsh wrote in the Wall Street Journal about devices used by dealerships, financing companies and leasing companies to disable vehicles if the drivers are behind in their payments. Rob Robertson of Austin, Texas, a member of the ABA Family Law Listserv, wrote today with this thought: How long will it be before we see this technology used in a divorce situation? Many family lawyers have clients with car loans that cannot be refinanced, and/or unhappy former spouses with credit woes when the ex doesn't make the car payment as ordered in the judgment.

Representing yourself in a divorce or custody case

So you want to represent yourself in a family law matter. Your case might involve something as simple as a mutual and respectful dissolution of the marriage. Or it might involve division of assets and liabilities. Perhaps it involves something more more complicated -- disputes about child custody and parenting time. Can you do it? Should you do it? Consider this ad on the Minneapolis Craigslist, called to my attention by Alexander Rhoads, a family lawyer in Des Moines Iowa who participates with thousands of family lawyers around the country in the American Bar Association's Family Law Listserv. **

The posting said:

How to choose a divorce or custody lawyer

Finding a good divorce lawyer may not be easy, but once it essential that you do so once it is apparent that divorce is inevitable. Word of mouth is often a good first step. Talk to those you know who’ve been through a divorce. Ask your friends or family who reside in the same geographical area for a recommendation. Often the local bar association will have a referral service. Alternatively, do an Internet search using key words that target a few specifics that you anticipate will apply in your divorce. Your search might look something like this:

• divorce lawyer your town, Michigan
• child custody lawyer, your town, Michigan
• property division, separate property, your town, Michigan