What can I do if my ex-spouse cannot refinance and get my name off of a mortgage?
Question Details:
My ex-spouse agreed to remove all debts from my name at dissolution, specifically a home in which both of our names are listed on the mortgage. I signed the quitclaim deed at dissolution. Ex-spouse has been unable to get the loan refinanced and this debt is still in my name. The date to which this was to be completed by is nearing very soon. If the bank will not refinance, what are my options in terms of this property? As the lending market is still very tight, I doubt this will be resolved through refinancing, need options.
The issue is you signed the quit claim deed at dissolution which, if it is filed, is proof of a transaction of the home. You no longer have a property interest in the home. You need to review the mortgage as many mortages I have seen have a payable in full clause upon transfers. That is what this was. The mortgage company may attempt to call the mortgage in full immediately. You are still responsible for said payments to the lender because you are on the mortgage.
However, the dissolution, depending on how it is worded, may offer you some protection. YOu need someone to review it to determine if it protects you from your ex defaulting. Was the dissolution written by you and/or your ex or was it prepared by an attorney?
One thing you could do is go back after the deadline for refinance passes and request the court order the house to be sold immediately. You can also attempt to file a motion to show cause. Has your ex attempted at more than one bank or just the one with the original mortgage?
Since they have been unable to re-finance, they can ask the lender to allow what is called a "novation" to remove your name. While this is only rarely allowed, it's still worth trying. A novation could be accomplished by your ex-spouse proving that they have paid the mortgage without you. If they are current and have never been late with payments, the lender may allow them to remove your name from the mortgage. A lander may also allow a novation if your ex-spouse "buys" your release by making a substantial payment to reduce the principal mortgage balance.
