Curious twists in traditional law issues.

I read this in the Florida Business Review - February 13, 2009

Today's economy may produce a house divided

No one knows the disruptive force of a bad economy better than a divorcing couple facing foreclosure.

Take the case of Joaquin A and Indra B, who have been married for almost nine years. They bought their Biscayne Park home near the height of the housing boom for $231,000 in 2005. It fell into foreclosure with them owing $222,000 last year, and the house went on the market.

B hadn't worked in a year, and the couple fell about $8,000 in arrears on the mortgage with Wells Fargo Bank. Her lawyer, Miami attorney Peter Abraham, filed an emergency motion for contempt for nonpayment of the mortgage and child support shortly after the foreclosure filing, stating, "Petitioner and the parties' minor child resides in the marital home and will be rendered homeless upon foreclosure."

Miami-Dade Circuit Judge Bernard Shapiro held A in contempt in July but held off on jailing him so he could square the mortgage. A divorce settlement agreement is awaiting B's signature. B and A' attorney declined to comment. Calls to A and B's attorney were not returned.

The predicament of what to do about family homes in divorce during a recession is rippling through the field of family law. What traditionally was a couple's biggest asset to be divided in a divorce has quickly transformed into the biggest debt and a major headache. "Initially, we were fighting over the equity in the house," said Linda Jaffe, a Fort Lauderdale solo practitioner who specializes in family law. Now "we're being faced with questions that I don't know that we're necessarily equipped as divorce lawyers to answer."

Should clients try renegotiating the mortgage? Go along with foreclosure? Abandon the property? Try a short sale? In the past year, Jaffe said she has been saddled with this new set of questions repeatedly. "It's an absolute catastrophe we're dealing with right now," she said. Stephen Butter, who has practiced divorce law for 44 years in Miami, said his role has changed with the financial tides. He has helped clients fend off foreclosure just long enough to salt away a deposit and first month's rent. A client who was a married homeowner a year earlier ends up being a divorced tenant with the bank taking the house.

"Now, it's rampant. Now when somebody comes in for divorce, their house is either in foreclosure, or they're already three or four months behind," he said.

For homeowners who owe more than the value of their home, the new question is how to equitably divide the value of a house — when it's negative. "Is that a marital liability?" he asked.

Butter worked on a case that ended with something of a biblical solution that left ownership of the home untouched. One of Butter's clients — a mother of five — was afraid to unload the family home in an ice-cold real estate market. He brokered a deal allowing her to alternate weeks in the family home and weeks away with her family or friends. The children remain in the home while the parents alternate. He would not identify the clients.

For better or worse, more couples are staying together. Divorce filings dropped to 14,250 from 16,508 in Miami-Dade Circuit Court; to 8,729 from 9,651 in the Broward Circuit Court; and to 5,554 from 5,927 in Palm Beach Circuit Court in the year ended last June compared with the year before.

Davie appraiser Don Sarley of Advanced Research and Appraisals, said plummeting home values have affected divorces in other unforeseen ways — like not being able to tap a home's value to pay attorney fees. "People can't pay lawyers," he said. "You can't even look at the house to lien anymore."

In the past year, the median sale price of a single-family home dropped 27 percent in Miami-Dade County, 23 percent in Broward County and 18 percent in Palm Beach County, according to the Florida Association of Realtors. And while the median sales price of Miami-Dade condos fell 12 percent during the same period, it shot down 29 percent in Fort Lauderdale and 27 percent in Palm Beach County, according to association figures. With home values in broad decline, the strategy for dealing with homes in divorce has been turned on its head. "Two years ago, they'd be fighting tooth and nail to get the house," Sarley said. "Now they don't want it."

But not everyone has noticed the pinch. Collaborative divorce lawyer Rosemary Roth in Miami, for instance, hasn't seen her practice affected much, but she readily admits the parties are generally conciliatory in her area of the law. Pinched finances may be working to keep families unwillingly together. "People are holding onto an otherwise bad situation because of economics," said Alison Taylor, executive director of the Oregon Family Institute, a think tank that examines the relationships between households and the courts.

"Since we usually see divorces happen when the money situation is no longer advantageous, we're probably going to see fewer and fewer families file for divorce," she said. "Kids are going to be subjected to a lot of conflict."

Nothing new in the domain of Money and Love and their eternal and intricate relationship.

Not your usual romantic story? Why not? Sometimes hardship and adversity in times of need can bond, improve understanding and perhaps the sense of family and mutual responsibility.

I am an eternal optimist.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,