Crash of the Housing Market Affects Divorces
Reading any newspaper today you will very likely find at least one sidebar or full article discussing the current mortgage crisis. Though there remains some fragment of the market which remains relatively unaffected by the collapsing sub prime market, the majority of the market has been shaken. There are rarely any homeowners who have yet to experience the effect of the downturn. With the worsening market situation, many consumers became unable to move forward with their lives. More specifically, divorcing couples are discovering that the real estate market situation is creating problems in their attempt to move forward with their lives.
Certainly, it is quite common for a number of divorcing couples to sell their family home so that they can use those funds to proceed with their separate lives. With an increase in housing inventory, most couples have found great difficulties in their attempts to sell their houses. This failure to sell has a direct impact on the separating couple's cash flow and certain sensitive areas, such as child support, are subsequently affected. Surprising enough, this problem also impacts where each party is able to live after the finalization of the divorce.
These problems caused a considerable rise in the post-marital cohabitation trend. Though it was very rare in the past to find couples continuing to live in the same house even after their divorce, it has now become more or less of a common phenomenon today. Quite simply, they have no choice but to cohabitate until they can sell their family home as they will need this cash to fund their new residences.
The average selling period required for most homes has soared in recent times which has in turn resulted in an extended cohabitation period for divorced couples of several months or in some cases as much as a year or even more. Younger couples with children as well as older couples with fixed incomes have both identified this as a particular problem. For couples with children, the only affordable options are usually too small to accommodate the family size.
In circumstances where couples can no loner bear living with each other, they become forced to make other living arrangements, which often translate to moving in with relatives.
Despite the circumstances, couples trapped in such a situation often find that they have very few available options. When the couple finds themselves upside down on their home because of a value decrease following the housing boom, the decision must be made whether to remain in their home while they wait out the market or to attempt a quick bail out by way of a short sale. Foreclosure is now a very real reality for those families that have become unable to cover their mortgage payments.
In many divorce cases nowadays, Judges are being asked to solve this problem as it has now become quite a serious matter. This is very common in cases where one party wishes to wait until the market gets better whereas the other wishes to proceed with the sale of the house even it will result in a loss. Judges are, in most cases, reluctant to issue sale orders on homes since it is expected for the market to eventually rebound.