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Advice on Divorce and Mortgage Title - The Bills.com Blog
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Advice on Divorce and Mortgage Title
Monday, Sep 22, 2008
Question: If I am getting a divorce from my wife and she is keeping the house, can I still be on the deed (but not on the loan)? It is an FHA loan--does this even matter?
Answer: I would encourage you (or your wife) to speak with your mortgage broker and with a representative of the Federal Housing Administration to determine the FHA’s lending policies regarding properties with two owners on a deed. You can contact the FHA by visiting www.fha.gov. From my past experience, most lenders are happy to include someone on the mortgage who is not listed on the deed, as this gives them someone else who is liable in case of default. On the other hand any bank offering a mortgage on a property with two owners listed on the deed would likely want both owners listed as obligors on the note. In most states, if a property lists two owners, then each owner is considered to own half of the property; therefore, a mortgage that is only owed by one of the owners creates a lien on only half of the property. For example, if you and your wife were listed on the deed and only your wife was listed on the mortgage, if she defaulted on the mortgage, the creditor would not be able to proceed with the foreclosure of the home until it had paid you for your interest in the property. No mortgage lender that I know would offer a mortgage on a home and only take a security
interest in half of the home’s value, which is what a lender would be doing in the situation you describe in your question. Rather than being listed on the note itself, some lenders will allow you to sign a consent agreement, stating that you agree to the mortgage of the property; speak with you broker if you are interested in such an arrangement. If you would like to learn more about mortgage loans and the various options available to consumers, I invite you to visit the Bills.com mortgage page.
Since your wife is taking possession of the familial home in the terms of your divorce, the most logical thing to do, in my mind, would be to sign over the deed to her sole possession, thus allowing her to improve, refinance, or sell the home unencumbered. However, I am not licensed to practice law in your state, so I cannot provide you with legal advice in this matter. You may need to retain partial ownership of the property for some legal reason about
Since your wife is taking possession of the familial home in the terms of your divorce, the most logical thing to do, in my mind, would be to sign over the deed to her sole possession, thus allowing her to improve, refinance, or sell the home unencumbered. However, I am not licensed to practice law in your state, so I cannot provide you with legal advice in this matter. You may need to retain partial ownership of the property for some legal reason about
which I am unaware, as I do not know all of the details of you and your spouse’s financial and martial situation. Since you are in the middle of a divorce, I assume that you have an attorney representing you in legal proceedings and in negotiations with your wife’s attorney. I strongly encourage you to contact your attorney to discuss this situation and determine what course of action you need to take to preserve your rights as a homeowner while honoring your obligations under the divorce settlement agreed upon by you and your wife.
Again, I think that the best thing you can do in this situation is to speak with your attorney, your mortgage broker, and the FHA, to find out what options are available to you and your wife to effectively resolve any issues related to your property. I wish you the best of luck in resolving these questions, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Again, I think that the best thing you can do in this situation is to speak with your attorney, your mortgage broker, and the FHA, to find out what options are available to you and your wife to effectively resolve any issues related to your property. I wish you the best of luck in resolving these questions, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
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1. Posted by ch on Saturday 18th October 2008 08:52
I am trying to buy a home via FHA loan. I am currently still married and have not legally separated. can I still qualify for an FHA loan?
2. Posted by Bill on Monday 20th October 2008 10:19
I don't think that marital status plays a big role in qualifying for a FHA loan, there are other criteria. If you are a first time home buyer, then read through this article: http://www.bills.com/qualify-for-mortgage-basics-article/. You can also use the following form to get matched with qualified FHA lenders: https://www.bills.com/homeloan/fha/.
3. Posted by Maria Karnik on Thursday 18th December 2008 05:50
My daughter and son purchased a condo in Atlanta a year ago. She just got married and my son will be taking over the condo. He wants to refinace at a great lower rate. How does this happen and can she just sign over her part in the condo to him or does he have to get a new mortgage since she will not be involved in this condo anymore? She was listed first on the mortgage.
4. Posted by Bill on Thursday 18th December 2008 09:04
Your son will have to qualify for a mortgage first and then the transfer of the title can take place. It will be a new loan as opposed to a refinance.