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 dictate who is responsible for mortgage payments, but it does not automatically remove someone's name from the mortgage. The lender holds all borrowers accountable for the mortgage duration. Even if the court orders one party to pay a debt, the lender can still pursue any borrower who signed the loan. The other party may need to enforce the court order through a motion for contempt.
To transfer responsibility for a mortgage, the mortgage may be assumable. Not all mortgages allow this, but if there is significant equity and good credit, the lender might permit it. Another option is refinancing the mortgage into one person's name, often by using 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.