Ex finally refinancing house; bank expects me to sign a quit claim deed
August 7, 2019 1:51 PM   Subscribe

I don't want to sign a quit claim deed until I'm shown proof I'm off the mortgage/old mortgage is ended. I will of course be reading every word of anything before I sign it, but I need to know what to watch for and how to protect my financial future.

It would be foolish/insane to remain on a mortgage for a house that I don't own.

How do I know for sure that the ex has a new mortgage instead of just having me sign a quit claim deed and keeping the old one? He seems to think we'll need to sign on the same day. If that's true, how can I be sure the new mortgage went through and was signed, etc., before I sign the quit claim deed?

I feel asking for proof is reasonable, but I know from experience that banks will say "We don't do it that way," when in fact it may be possible and reasonable, just extra work they don't want to put up with.

*Is* this reasonable? How is this usually done? What should I know? What kind of proof can I ask for?
posted by AllieTessKipp to Work & Money (12 answers total)
Best answer: In my divorce, she was able to get the new mortgage with a stipulated decree stating when I would submit the quit claim.

In your shoes, I would retain a lawyer to help with this - if he is taking out the new mortgage before the divorce is final you could still be liable for the mortgage should he default. In any event, laws can vary regarding this. You're right to think this through. Get a lawyer.
posted by Pogo_Fuzzybutt at 2:08 PM on August 7, 2019 [14 favorites]

Can you afford a few hundred dollars to get your own (real estate) lawyer? It might be well worth it for your peace of mind.

Otherwise this stuff is very location-dependent so you might get better answers if you include the state.
posted by mskyle at 2:09 PM on August 7, 2019 [1 favorite]

If you have any concerns about shenanigans whatsoever, get a lawyer. This is definitely an area where the investment is worth it.

(The new mortgage should be registered in your state's land registry, but maybe not fast enough for your purposes.)
posted by praemunire at 2:27 PM on August 7, 2019

Agree 100% that you should have a lawyer involved in this. Assuming the house is a major asset/obligation relative to your finances, this is not something you want to do without speaking with a lawyer who knows about real estate and ideally also divorce.
posted by Mid at 2:30 PM on August 7, 2019

Best answer: While you should check with a lawyer, I think this is pretty clear -- your ex cannot get a mortgage on his own for a house that he does not have a clear title to. His mortgage company wants to know that you won't compete with their claim to the title. They won't issue the mortgage without it.

You are absolutely correct that as a part of the transaction (on the same day), his new solo mortgage pays off your old joint mortgage, and releases you from responsibility to the old mortgage. You should ask for a statement that that mortgage with your name has been fulfilled or cancelled.

I don't think it would be possible for him to get a new mortgage with you on it without a great deal of shenanigans or paperwork from you, so I doubt that is the case.
posted by Dashy at 2:37 PM on August 7, 2019 [2 favorites]

Best answer: Keep the documents clear in your mind. The document that obligates someone to pay is the promissory note. If a new promissory note is signed by him and the old one is destroyed, cancelled, or marked paid, you are in the clear. It does not really matter if your name remains on a mortgage if there is no obligation under a promissory note and if you have no interest in the land.

Even so, you want a "discharge of mortgage" and they want a quit-claim deed, each to confirm that the signer asserts no further claim or interest. This is handled at the closing. Each of you signs and the closing then takes place. If they don't sign, neither do you.
posted by megatherium at 2:47 PM on August 7, 2019 [5 favorites]

My ex had to sign some paperwork when I refinanced, and the title company (who does the mortgage paperwork in my state) made separate appointments with us to come in around the same time. We did all this while we were still legally married and we didn't finalize our divorce until months later (in case that's relevant). In any case, this all seems to me to be part of the same thing -- I don't think your ex can get the new mortgage without you also agreeing not to be on the title.

Are you using a lawyer for your divorce? I used a mediator so I didn't run this past a lawyer. But it sounds like the bank reached out to you and you haven't even asked them about the process. I'd say start with that. This process -- refinancing a mortgage when a couple separates -- happens all the time, and the bank should be able to explain it. But it could be a conversation with a real estate attorney will give you some peace of mind.
posted by bluedaisy at 3:00 PM on August 7, 2019

Response by poster: I should add that we have been divorced for over 2 years. We're both in Washington State and so is the house. Bank did not reach out to me; he is the one talking to the bank.

We live hours apart and we will not be signing at the same time in the same place.

Could I require a conditional statement in the quit claim deed? "I only agree to sign away my interest in the house if his new mortgage goes through/I am released from responsibility to the old mortgage"?

Do I want a real estate lawyer if I consult one? Or some other kind?
posted by AllieTessKipp at 3:01 PM on August 7, 2019 [1 favorite]

Real estate lawyer.
posted by praemunire at 3:08 PM on August 7, 2019 [3 favorites]

When I refinanced my ex off my townhouse, one of the papers they required was a signed quit claim deed at closing. The title company was happy to provide one, it was part of the closing package. In your situation if you’re worried about it, the only way to do it would be to sign it at closing, which might be annoying because I’m fairly sure they need to be notarized. My ex signed it a few days before my re-fi, and I cut him a check for his equity after my new loan processed. It might be worth your peace of mind to talk to a real estate lawyer about it, but it’s a very simple and common process.
posted by katypickle at 3:56 PM on August 7, 2019 [1 favorite]

I was in your ex's situation, and it was even wonkier because the original mortgage was in my ex's name. The bank had a lawyer who handled all the paperwork- I needed to reach out to my ex to ask him to call the law office and make an appointment to sign the proper paperwork, he went in the day before the closing, and signed off on the quit claim deed, I went in the next day and did the closing. His bank was paid off with my new mortgage.

Additionally, we had this agreement spelled out in our divorce agreement- that as soon as I was able to refinance on my own, I would, and his name and financial entanglements with the house would be through. What does your divorce agreement say? If this is not covered, then you would want to see a lawyer about a post divorce agreement if you really want to cover yourself. You might check in with your original divorce lawyer about this.
posted by momochan at 4:03 PM on August 7, 2019 [1 favorite]

Nthing a lawyer since WA is a community property state, but in any case the lender will be able to send a notary public out to you for any signatures required. This situation isn’t unique and surely they’ve got the correct sequence and documents to overcome it.
posted by OneSmartMonkey at 8:48 PM on August 7, 2019

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