No, you take the house!

  Thanks to plummeting property values, divorcing couples now find themselves fighting for the right not to keep the house.

The crippled real estate market has turned once-valuable assets into huge financial burdens. Homes bought at or near the peak of the housing market in 2005 and 2006 have lost tens of thousands of dollars in value in just a few years, forcing many discordant couples to keep a painful reminder of a failed relationship.

“Instead of fighting over the house, we’re fighting over who gets stuck with it,” said Steve Halbert, 57, an Arlington homeowner going through a divorce.

Halbert and his wife bought their house in 2006, shortly before their marriage and the housing market took a turn for the worse.

“We thought we’d be walking away with hundreds of thousands of dollars in equity. But there is no equity,” he said.

Undergoing his fourth divorce — and working as a real estate appraiser — Halbert said he’s accustomed to heated legal battles over property ownership.

But unlike on his first three trips to divorce court, Halbert said he’s hoping to lose possession of his house this time around.

Divorce lawyers across Washington say Halbert’s situation is common, thanks to the tumble in the housing market.

“Anybody who practices in this area has seen the same thing,” said divorce lawyer Hughie Hunt, who represents clients in Maryland and the District.

Lawyer Michelle Thomas said the drop in home values and the resulting financial strife have translated to more contentious divorce negotiations for her clients in D.C. and Virginia.

“Homes had always been an asset, until the last two years or so,” Thomas said. “You had a situation where there was $100,000 or $200,000 of equity in a house to be divided, and that’s not the case anymore.”

Now, the opposite is true.

“I had some folks that bought a home and then ended up splitting up, and the home hasn’t been worth enough to sell. They ended up renting it for a loss,” said Chris Upham, a Coldwell Banker real estate agent who works throughout the region. “That’s something I’ve seen a lot lately.”

Jessie Peterson and her husband, Jeff Holmberg, who are separating, bought their Northeast Baltimore home in 2007, and then watched helplessly as it lost 10 percent of its value.

Peterson said arguments about the house made an already-difficult situation a lot tougher.

“You’re at each other’s throats. You’re dealing with this huge burden of this house with absolutely no solutions,” Peterson, 30, said of the arguments she and Holmberg had about what to do with their house. “It’s hard to maintain any kind of peace when you’re in that situation.”

Peterson said she and her husband hadn’t built up any equity in their home, so refinancing wasn’t an option. Filing for foreclosure would have damaged the couple’s credit, so they had to work out another solution.

Holmberg agreed to take possession of the house and the mortgage. But, at least for now, Peterson’s name will stay on the deed, in an arrangement that leaves her feeling “terribly uncomfortable,” though happy to move on.

Likewise, Halbert said the financial mess involving his house made a bad situation much worse.

“It became the biggest thorn between us,” he said, chuckling at the irony of his situation. “We’ve ended up fighting a lot over this.”

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