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Partition action when property is upside down?

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scottdouglas1618 Joined: 13 Aug 2010 Posts: 1 1.00 Dollars($)	Posted: Fri Aug 13, 2010 9:33 am    Post subject: Partition action when property is upside down? Like 0 Dislike 0 A California property is owned by Jim and Bill as tenants in common. The mortgage is held in only Jim's name due to Bill’s credit problems. Both have been paying a fair share toward the mortgage for several years. Now, the property is underwater and Bill, who is not named on the note, has walked away, is declining to pay his established share, and is demanding at threat of a partition action that Jim “refund” to Bill all principle and interest payments Bill has ever made before he will sign over title to Jim. As the only one named on the mortgage note and only half owner of the upside down property, what would likely occur in a partition action?
jameshogg Joined: 20 Dec 2005 Posts: 10460 Location: Nevada 987.57 Dollars($)	Posted: Fri Aug 13, 2010 11:28 pm    Post subject: Like 0 Dislike 0 Hi scottdouglas, In case of a partition lawsuit, the court will order the sale of the property. After the property is sold off, the mortgage dues will be paid off first from the sale proceeds. If there is an excess amount, then the court will divide it between Jim and Bill. Thanks
Guest	Posted: Sat Aug 14, 2010 8:34 am    Post subject: Like 0 Dislike 0 Thanks for the reply jameshogg. But the entire point of the question is that the property is upside down. There is no chance that a sale would generate sufficient funds to pay of the mortgage let alone produce any excess for Jim and Bill. Would Jim and Bill be "on the hook" to make up the difference or would the sale be thwarted due to the inability to find a buyer willing to at least pay the mortgage balance?
adonis Joined: 22 Oct 2005 Posts: 10562 Location: ALASKA 1089.18 Dollars($)	Posted: Sun Aug 15, 2010 10:07 pm    Post subject: Like 0 Dislike 0 Hi Guest, If the property sale does not pay off the mortgage balance in full, then the person whose name is on the mortgage docs will have to pay off the deficient balance to the lender. _________________ Procrastination is the enemy of your financial success

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