New York, NY- Divorce itself is hard on a family and those involved, but because of our downward economy and housing market, unhappy couples are now forced to continue cohabitation. Couples, who have invested in a home after getting married, simply cannot unload their house nor recoup their investment in today’s economic state, as home values have plummeted, reports ABC News and Smart Money.
It’s the American dream to get married, buy a house with a white picket fence and have children. But many of those “American dreams” are being shattered as marriages fall apart and spouses realize they cannot survive by themselves in today’s economy.
For majority of people, their home is one of their biggest investments, along with their 401(k). But because of the housing market crash and massive amounts of defaulted mortgage loans, home values have plummeted. In fact, Moody’s Economy.com reported that 31.8 percent of first-time homeowners are currently “underwater,” meaning their homes are valued less than what is owed to the mortgage company. This spells disaster for unhappy couples that are trying to divorce, who are now forced to live under the same roof and have to split their liabilities instead of assets.
The president of the Institute for Divorce Financial Analysis, Fadi Baradihi said, “It used to be that couples fought over the house because of continuity and stability for the children. That’s not happening anymore. Now everybody wants to run from it.”
YS Mediation, prominent divorce mediators and attorneys located in New York assert that not all hope is lost if you find your marriage facing divorce. The divorce mediators suggest a few options for divorcing couples to consider instead of cohabitating:
1. Waiting It Out: Under this option both couples would continue to share joint ownership, but agree to sell the house in specified number of years (like when the children go off to college). Usually one person would move out until the home values rise again and they are able to sell their house.
2. Rent Your Home: Renting your home is a great option until the housing market recovers. This allows both spouses to move out of their home and rent it to someone else, covering a large portion, if not all of the mortgage. The spouses can live separately and likely spend less on rent then they would on a mortgage.
3. Short Sale: Accepting the loss and moving on is sometimes the best option. The couple would have to negotiate with their lender to pay the difference between the sale price of the home and the amount they owe. Sometimes the lender will even agree to take the entire loss. This allows couples to get out and move on faster.
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