A New Jersey judge has provided guidance to other family court judges for cases in which an ex-spouse, who remained in the marital home, fails to take steps to remove the other ex-spouse’s name from the mortgage in violation of a divorce agreement.
A breach of such an agreement can negatively affect the non-resident’s credit rating, and the ex-spouse can be forced to put the house up for sale as a remedy, Ocean County Superior Court Judge Lawrence Jones said in an unpublished ruling in L.H. v. D.H., released Nov. 23.
Jones said the affected ex-spouse can be given power of attorney to list the house, and that the person still living in the house can be forcibly removed if he or she makes any attempt to block or thwart the sale.
“[I]t is vital to consider the growing economic significance of credit reports, scores, and creditworthiness in people’s lives,” Jones said, adding that the relevance of credit ratings following divorce “cannot be overstated.”
“Against this backdrop … this court takes judicial notice, as a matter of indisputable common knowledge, that a positive credit rating and score is one of the most valuable and important assets a party may presently possess,” he said.
In this case, L.H. and D.H. divorced in 2012 following a 12-year marriage, according to the opinion. They had no children.
Under the terms of the settlement agreement, L.H. would be allowed to remain in the marital home, provided that she refinance the mortgage in her name only. The house had a market value of $230,000, and had an outstanding mortgage of $204,000, the ruling said.
L.H. never moved to refinance the mortgage. She made the monthly payments, but was occasionally late, the ruling said. In 2014 and 2015, D.H. tried to get a mortgage for a home of his own, but found that his credit score, and his ability to obtain a mortgage at a favorable interest rate, was impaired because his name was still on the original mortgage.
D.H. then filed a post-judgment motion asking that L.H. be ordered to sell the house to pay off the mortgage, appoint him as an attorney-in-fact to market and sell the house through a realtor and, if necessary, remove L.H. from the house, the opinion said.