How do I get offa mortgage?

My ex-wife and I have been separated for 2 years divorced for 1 year. My name is still on the home loan. She is remarried and has a new child by her new husband. She is having a new home built and is planning on renting the house to a friend who recently had his home repossessed for failure to make the payments. She has been making the mortgage payments since our separation. I do not agree with this. She claims she cannot refinance it until her new home is complete and she will have the funds to pay both mortgages. How can I get my name off of the loan? Refinance? Sell it? She is not returning calls or answering questions.

Asked on December 1, 2011 under Family Law, Indiana

Answers:

L.P., Member, Pennsylvania and New Jersey Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Thank you for submitting your question regarding how to get your name off of a mortgage for your house that you owned and maintained during a prior mortgage.  Your dilemma is one faced by many divorced or divorcing couples.  First you may be aware that a bank is unlikely to voluntarily remove a person from the mortgage, because mortgages are legally binding contracts.  When the bank approved the mortgage, it considered all creditors and assessed the risks of all parties.  The mortgage payments and rates were determined based on the risk of the loan for all borrowers. 

There are a number of options for getting your name removed from the mortgage.  However, you should be prepared that none of the options may appear to be ideal.  These options are for mortgages where a party wants to be removed to avoid liability on joint or co-signed loan.  First, you could file for Chapter 7 bankruptcy.  When the bankruptcy proceedings commence, this mortgage will appear as part of your debt.  Of course many people try to avoid bankruptcy unless it is absolutely necessary.  Secondly, you could refinance the loan and not include the other party in the refinance.  Thirdly, you could sell the home, and the sale will extinguish your liability to the loan, but this cannot be done if you have a deficiency balance.  Next, you can allow for a strategic default.  However, all borrowers will be held liable for a deficiency balance. 

You can also attempt to obtain a quit-claim deed, which will remove your interest in the home and remove your name from the title.  However, the quit-claim did will not alleviate your liability to the financial institution. 

Also, consider how this property was handled in the divorce decree.  You may have more options depending on the language of the decree.  You can also seek more guidance by contacting a family law attorney in your area.

 


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