I'm working with a couple who are about $50K upside down.  Loan is $152K, house value is about $103K.  They are getting a divorce and need advice about how to handle the house and mortgage in the divorce papers.  This is in Florida.

There is one loan with BOA which was originally a sub-prime with a balance of about $152K.  All payments have been made on time.  Not a Fannie or Freddie loan.

Husband currently makes over $100K/yr and wife makes $35K.  

What they would like to do is this.

Wife will stay in the house for one year and husband will make house payments.

Husband wants to buy another house immediately after the divorce.  He has a 720 credit score and his DTI ratio will be 41% which includes both house payments.  This should be adequate to qualify for the new house even with the current payment.

They have no long-term plans for the existing house, but will probably sell it on a short sale after one year.

I have several questions:

1.  How should this be structured in the divorce?   The goal is to minimize or eliminate the deficiency that they will have to pay the bank.  The attorney is apparently no help.  He told them to decide what they wanted to do and he would put it in the documents.  I think this is a question that a short sale expert can answer better than a divorce attorney.  

Would it help if husband executed a quit claim deed so that the property was in the name of the wife?  This would definitely be a hardship for her and would be less of a hardship for husband.

2.  Given the income of husband what is the likely outcome of the short sale negotiations?

3.  The husband would prefer to keep the payments current.  Is this going to make the short sale more difficult.

I'm not asking for legal advice, just thoughts of how it can be done.  If I can give them some good ideas to present to their attorney I can probably get two sales..

Thanks in advance for your help.