Can I sue my ex husband for taking out a hard cash loan on my home the he can no longer pay?
The answer will depend on the facts involved, such as the terms of the divorce decree, the ownership of the home, whether a security interest was agreed to in the loan, and prior liens. Typically, the assets and debts of a couple are divided in a divorce and the property awarded only to one spouse is not allowed to be encumbered by the other spouse after the divorce.
If a house is used as collateral for a loan, the person agreeing to the security interest must have some ownership rights in the house. A security interest is by nature a consensual interest. It arises because the debtor has consented to its existence. But the consent must be manifested with respect to assets which the debtor has some right to control. A stranger cannot create a security interest in assets which the stranger does not own or appropriately control. Giving such a power to a stranger would interfere with the rights of the person entitled to control the property. The debtor must have some authority over the assets in order to create an interest in them.
Even if a valid security interest was created, it is possible the house already has a lien created by the mortgage lender which takes priority. A mortgage loan will typically create a lien on a home and if filed before another debtor, the mortgage lien will be entitled to be paid first before the remaining proceeds, if any, can be paid to junior creditors.