Name still on home loan after divorce...
May 25, 2016 6:54 PM   Subscribe

It's been a long frustrating 18 months going through divorce. In trial my lawyer and I tried to get the house, but were unsuccessful. So, Asshat gets the house in the decree and I get a cash settlement.

However my lawyer didn't mention that Asshat should have to refinance the home to get my name off of it. We tried to get that changed, but the judge wouldn't budge. I'm now worried that I am on the hook should he ever default. I am also concerned that lenders will see that debt on my credit report and it will disqualify me from buying my own home. This is all a part of the Ass's plan. Whatever can be done to injure me is the goal. Lawyer says it shouldn't be a problem if I show my divorce decree, but I am worried this will really cause me issues here in the next six months when I start the process of purchasing my own home.

I know my lawyer was negligent in this manner and I am frustrated beyond belief.

Am I creating an issue where this is none? To be honest, I don't ever expect Asshat to default or to sell the home (it's his prize, right?), so that is probably ok. I just don't want this to keep me from being able to purchase my own home in the future.
posted by OkTwigs to Law & Government (13 answers total) 3 users marked this as a favorite
This is what a quitclaim deed is for. Asshat doesn't have to refinance, he just need to get the loan reassigned to him only. I am unclear if you are doing this and that is what he is refusing to do?
posted by jessamyn at 7:28 PM on May 25, 2016 [2 favorites]

I know my lawyer was negligent in this manner...

Please discuss this matter with another lawyer in your jurisdiction. Please don't take advice from non-lawyers spouting off on the Internet.
posted by spacewrench at 7:31 PM on May 25, 2016 [8 favorites]

When I divorced my ex signed a quit claim deed. That was all it took. In CA.
posted by cairnoflore at 7:40 PM on May 25, 2016

I should have added that I think it would be you signing off on the house. At least that is how it worked with us. We both had to sign with notaries.
posted by cairnoflore at 7:43 PM on May 25, 2016

He's so hateful I don't know if he'd even do that. I will speak with my lawyer again, and get a second opinion from another about this matter. Thank you. I'm in Washington.
posted by OkTwigs at 7:46 PM on May 25, 2016

Wait now. There's being on the deed and then there's being on the loan. I don't think someone who co-signed on the loan can just unilaterally remove their financial responsibility. I might have the terms wrong, but there are two distinct things here.
posted by slidell at 8:25 PM on May 25, 2016 [15 favorites]

To my understanding, he would need to refinance to get you off the mortgage officially (and therefore get off the loan off your credit report), but a quit claim deed should limit your liability should he default on the loan.
posted by guster4lovers at 8:38 PM on May 25, 2016

Slidel is right. I was on the deed but not on the loan. However, I wanted and was awarded the house. In ga....I had six months to refinance...and I had to wait that long to establish alimony as my income. Ex signed a quit claim deed that my lawyer held until the refinance went through. Now, everything is in my name. Your situation is different and ymmv.... Just sharing my process for reference. Good luck.
posted by pearlybob at 9:32 PM on May 25, 2016

You mention that you're in Washington so I want to nth talking to a lawyer. Washington state has some, let's just say, clever rules around community property and primary residences. You signing a quit claim deed to remove your name from title* may not do what you expect depending on the circumstances of your divorce and whether or not you are on the loan itself. This is something that your lawyer should have helped you clear up so I would advise seeking another attorney. If you are in Seattle, there are many lawyers who work with people who are aggrieved in the way you are.

* As slidell mentions and pearlybob confirms, you can be on the loan and on the title/deed separately and the two are interconnected but not always the same. A quit claim deed will, usually, remove you from the title but cannot remove you from the loan. Only a changing/refinance of the mortgage solely in someone else's name—either through your ex refinancing or a sale of the property—can do that. (Lenders are not, usually, bound by divorce decrees when it comes to enforcing debt.)

I'm sorry to say that you are in a not-at-all-uncommon situation when it comes to divorces with property.
posted by fireoyster at 11:56 PM on May 25, 2016 [1 favorite]


Exercise extreme care, review the documents, and consult a lawyer/talk to the one you already have before signing any kind of deed whatsoever. Under many of the consumer mortgage documents I'm familiar with, a default under the mortgage can occur when one of the mortgagees (any of the people who took out or people who are "on" a mortgage) delivers a deed. This is because of provisions meant to protect the lender in the event of a sale or other transfer of the property. There may be a provision in the mortgage, the divorce decree, or applicable law that protect you or address this issue, but random people on the Internet won't be able to tell you that.
posted by joyceanmachine at 6:40 AM on May 26, 2016 [1 favorite]

This is what a quitclaim deed is for. Asshat doesn't have to refinance, he just need to get the loan reassigned to him only. I am unclear if you are doing this and that is what he is refusing to do?

This is a pretty common conflation of the deed and mortgage. The OP is divorced and part of the divorce decree has been to file a quitclaim deed thereby taking her name off of the deed.

To get her name off of the loan requires A. the loan to be paid off, B. the loan to be assumable (in which case there is an underwriting process for Asshat to go through), or C. refinance.

Anyone can pay off your loan for you but that isn't likely to happen before the end of the loan's term. The other two options require cooperation from Asshat. So you're left counting on the bank's credit policy or them making an exception (both of which are likely in your situation).

If the divorce decree says that Asshat gets the house AND is responsible for all the payments, including the loan (which might be as simple as a clause saying, "... and all associated expenses" or something), then whichever bank you apply through just needs a copy of the divorce decree and maybe a copy of the quit claim to show that your name is no longer on the deed. If the bank's credit policy doesn't specifically speak to your situation, it's likely (depending on the bank and the underwriter) that they would make an exception once they understand the situation and have the appropriate documentation.

Some bank will approve a loan for you (assuming that the loan-to-value ratio, credit score, and other stuff meets their standards).
posted by VTX at 8:40 AM on May 26, 2016 [1 favorite]

He refuses to refinance. Period.
posted by OkTwigs at 12:35 PM on May 26, 2016

Of course he does. The risk/reward ratio is way skewed in his favor and he's not a good person.

You need legal advice on whether you have any recourse now to force both him and the bank to accommodate this (and banks don't love taking people off the hook for debt), and whether you have recourse against your lawyer for not attending to this in the divorce. This should probably be from different people. A lawyer who knows the family /real estate stuff may not know the suing other lawyers stuff (though they may be able to recommend someone).

I'm sorry you're having to deal with this, especially after you thought you were done. But your concerns about his default or your credit worthiness are very valid, and it sounds like it is worth the extra money and effort now to be truly disentangled from him. Good luck.
posted by Salamandrous at 12:47 PM on May 26, 2016 [1 favorite]

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