Full question:
My daughter who is 36 years old recently was divorced. She and her husband were joint owners, and joint signers on the mortgage for the house. They owe about $150,000 and the house would be worth twice that if the housing market were not so depressed. As a part of the final settlement, she quick-deeded her house to her ex-husband. After a two-year court fight, she ran out of emotional energy and also gave him primary custody of the children. It was her understanding that they would have the house to grow up in. Now the ex-husband is no longer making the payments on the home. Today he has told her that he plans to declare bankruptcy. It would appear that if he does so, she might still be liable for the mortgage, even though she no longer owns the house or any part thereof. Is that correct? So I am guessing that even if she takes over the payments to protect her credit rating and pays off the house, she would still not own it. It looks she is in a big mess. Is there anything she can do?
- Category: Debts and Credit
- Date:
- State: National
Answer:
A divorce decree may determine who is liable for a mortgage payment, but doesn't automatically remove a person's name from a mortgage. The lender holds the borrower responsible for the duration of the mortgage. A person who takes out a loan such as a mortgage remains responsible for payment unless the contract is changed. In the case of a divorce, a person will have the debts and assets divided. Although the court may order one party to be responsible for payment of a debt, it is often the case that the lender will seek to recover from any party who signed the loan, leaving the other party to seek enforcement of the court order by way of a motion for contempt.
To transfer financial responsibility for a mortgage to another, the mortgage may be able to be assumed. Many mortgages are not assumable, but the larger the amount of equity in the property and the better the credit history involved, the more likely the lender is to allow the mortgage to be assumed. Another option is to refinance the property into only one individual's name. This is typically done by way of a second mortgage.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
