Divorce Still The No. 1 Cause Of Foreclosures

Q. Almost a year ago, my husband and I bought a home for nothing down with a $175,000 VA mortgage. The monthly payment is $1,710 at 9.5 percent interest. With two jobs, we had plenty of income to make the payments.

But in November 1991, my husband left and wants no part of the house. I'm not earning enough to continue making the mortgage payments. I don't even have an extra bedroom to rent out to help increase my income.

Local real-estate agents tell me if I sell the house now I will have a loss after paying the sales commission. If I just walk away, what happens to my credit? I have thought of having someone assume my mortgage but how would I do that?

A: Divorce is the No. 1 cause of mortgage lender-foreclosure losses. Your situation is not unusual.

If you quit making mortgage payments, the credit of both you and your ex-husband will be hurt. It would be better to work out a solution with the lender, such as a buyer assuming the existing VA mortgage so you can be relieved of liability for it.

Although I usually don't recommend selling without the help of a professional real-estate agent, your situation is an exception. You could advertise the house "PAY CLOSING COSTS. ASSUME VA MORTGAGE." When you get an interested buyer who has enough income to qualify for the mortgage assumption, if the lender approves the loan assumption be sure you are released from further liability on that VA mortgage.

Of course, your ex-husband will have to cooperate by signing a quit claim deed to the buyer. For further details, please consult a local real-estate attorney.