If the deed/title is in my name but not the mortgage, am I liable if I just walk away from the property?
Question Details:
My wife and I purchased a house 15 months ago. We went to closing and thought we were assuming the mortgage on the house. As it turns out, the bank never recognized the assumption and the insurance company didn't either (they immediately canceled the policy when I contacted them about a claim). Even though we've been making the monthly loan payments and the deed is in our name, are we responsible for the mortgage or could we we walk away and not be liable?
If you are not responsible for the loan, but you are on the deed, you just cannot walk away. Perhaps you can convey your interest to the other co-owner to remove yourself from the deed. Visit www.WeaverLawyers.com for futher real estate information.
If the purchase contract that you purchased the home from the prior owner stated you were assuming the existing loan secured by a trust deed or mortgage on the property, but the existing loan for the purchased home is not assumable, and no paper work has been drawn up and signed by you and the lending institution allowing the assumption of this loan, you are not legally responsible to the lender for the loan even though you are on legal title to the property.
You could stop paying on the mortgage and the lender has no recourse against you for this. However, the former owner may have recourse against you for not paying on the loan that all thought was an assumable loan if the home is foreclosed upon due to your failure to pay the monthly mortgage and there is a deficiency judgment.
If the loan is not assumable and you want your own loan for the home, the way to proceed is to refinance the existing loan.
