PrePay Penalty Issue...Need Your Help ASAP !
Here is the scenario: A married couple owned a home in California....the couple separated (husband went out of the country) and the wife quit claimed the home to herself (this issue was posted on another forum)...during the separation, the wife refinanced the house in to her name ONLY.... now the couple is divorced and as part of the settlement, the husband was awarded THE HOUSE....(REMEMBER.....the loan is in HER name) He now wants to sell the house but will hardly make any profit since there are PREPAY PENALTIES totallying 8000.00....is there something he can do to avoid the prepay penalties....(Note: he cant afford to keep the house and needs the extra cash to pay attorney fees from the divorce) Is this man just out of luck or is there something else he can do. Any advice would be greatly appreciated.....
The quit claim was illegal/fraudulant. He may had recourse in the form of damages, criminal action against ex-wife, and a claim against the title company.
In California, the husband must sign off (i.e. quit claim) his community property interest in order for the wife to have been able to get the new loan, UNLESS 1) she was vested in title as a "married woman, sole and separate" property, which means he signed off his interest during the marriage, 2) she had title as a "single woman," which means that she owned the property prior to marriage (or lied about being single when she purchased it originally), or 3) he gave her a power fo attorney to finance/sell the house before leaving the country.
If the quit claim can be shown to be fraudulent, he may be able to force the waiver of the prepay clause and or have a claim against the title company for releasing his interest. If the quit claim is voidable, this creates a cloud on title which may get the lender to cooperate in waiving the prepay or refinancing in his name to a program that may make it feasible for him to keep the house (i.e. like an Option ARM loan); lender will likely want a 3-year prepay on new loan.
thanks ..... keep in mind that she has now quit claimed the property back to him as result of the court order but the loan is still in her name. This is such a mess !!!!
Wife is in trouble, bank is in trouble.. A good lawyer should be able to handle this easy.. I am thinking the wife wrote the QC deed and title company was not invloved. what happened with the title company is not clear.
Let us know what happened. Good Luck.