Tough negotiation or extortion?


#1

My wife and I are in the process of buying a house, we are already under contract and have a closing date. Despite the fact that she has been officially divorced from her ex-husband for three years, she and her ex have never yet to be to court for equity distribution. He lives in the house and pays the mortgage. Our lender has just told us that since her name is still on the mortgage, they are going to need a notarized letter from him stating that he will be the sole name on the lien when they do finally go to court. He has agreed to write a letter, but only if she agrees to his “perceived value” of the house which is about $50,000 less than what the tax appraisal, almost $70,000 less than the re-sale appraisal, and much less than they originally paid for it, when they finally go to court. We could lose the house and the $1,000 earnest money because of this or she could lose a significant amount of what is rightfully hers.

Here is my question. Is this just tough negotiation, or, could it be illegal?


#2

I don’t see anything illegal in purporting that the house is valued at less than you believe it to be valued, although I’m not familiar with this letter you are speaking about. Typically a party is liable for the mortgage until the mortgage is refinanced or the other party obtains an assumption of the mortgage.