How can I get a mortgage lender to recognize a quit claim deed?
Question Details: During our divorce, my ex-wife was given the house, along with the responsibility of the mortgage. She also got a quit claim deed to have my name removed from the loan. However, the lender does not recognize this and refuses to have my name removed from the loan. How do I get my name removed?
The lender is not bound by your divorce. You signed a promissory note and a mortgage. This created what is know as privity of contract (the note) and privity of estate (the mortgage). As you no longer own the real estate, you and the lender no longer share privity of estate. However, the note has not been paid off and you still share privity of contract. There are two ways to terminate your liablity under the note. You can ask the lender to terminate your liability (called a novation). Usually, lenders refuse to do this. The other way is to pay off the note. Since interest rates are extremely low, perhaps your wife can refinance the house and pay off the existing mortgage.
