While U.S. Olympic Swimmer Ryan Lochte has been stacking up gold medals in the London games, his parents have been drowning in debt in Florida.
Court filings indicate that the Olympian’s parents, now divorced, took out a mortgage loan in Volusia County in 2007 for about $260,000, which had them paying about $1,600 a month. Then early last year, the couple divorced and subsequently defaulted on that loan.
Our Miami foreclosure lawyers realize that the reason this case made headlines was because of their son and his current fame. The truth is, though, this scenario of newly divorced and facing foreclosure is not unusual.
Prior to the housing crisis, if a couple split, they simply sold the home, split the profit and went their separate ways.
The housing bust changed all that.
The problem is that many people are underwater on their mortgages, meaning they owe far more than their home is worth. That creates big problems for divorcing couples who can no longer simply sell and be done with it. In most cases, they either have to cooperate at least on some level to negotiate a loan modification or work out a short sale.
Another option is bankruptcy. This would allow you to erase all your debts, but it can harm your credit (as will a foreclosure) and it’s not generally advisable to go down either road without first consulting an experienced attorney.
How you proceed is going to depend on many factors including: Whether one of you intends to try to stay in the home, how far underwater you are and what sort of resources you have to try to keep it.
If you do decide to try to keep it, with the help of your spouse’s support payments, you always have to consider the possibility that the other person may simply stop paying. You need to determine whether this is something you would realistically be able to shoulder on your own.
It’s possible that you can if you are successful in getting a home modification plan, which your foreclosure defense attorney can help you negotiate. This will reduce those sky-high payments to a fair market value.
With Lochtes’ parents, it’s not clear if one of them decided to stop paying and the other simply couldn’t afford to continue shelling out the entire amount each month or whether both of them jointly decided to let it go.
Our Miami foreclosure attorneys understand that the couple currently owes more than $240,000 plus interest on their home, and CitiMortgage has taken them to court in order to follow through with a foreclosure. The couple could be held responsible for the difference in the resale price versus what they owe, so it may be worth it to try to work out a loan modification before the home is foreclosed upon.
The couple has most recently been in London to watch their son compete. He has (as of this writing) won five gold medals in swimming competitions.
If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991.