Ask Me Help Desk - Removing Name from Mortagage

My friend and his wife have been divorced for about 2 months now and he's more than ready to move out. He's willing to give the house to his ex wife and just wants his name off the mortgage so he can leave without having no financial ties to that house whatsoever but he's unsure how to go about it. At first he was told that refinancing would do it but much to his dismay, he was told that his name would still be on the mortgage. He's just ready to start a new life with his new girlfriend and get out of that tension-filled house asap. What should he do?

In order to have his name off the mortgage, his ex has to 'buy' the house from him. Wherein only her name will be on the mortgage as the owner. I don't know why he would give up his monetary rights to half the house, which he will probably regret later on.

Is he divorcing or just separating. All of this has to be taken into consideration.

Tick

Quote:

Originally Posted by bean19151

My friend and his wife have been divorced for about 2 months now and he's more than ready to move out. He's willing to give the house to his ex wife and just wants his name off the mortgage so he can leave without having no financial ties to that house whatsoever but he's unsure how to go about it. At first he was told that refinancing would do it but much to his dismay, he was told that his name would still be on the mortgage. He's just ready to start a new life with his new girlfriend and get out of that tension-filled house asap. What should he do??

She needs to get a mortgage in her sole name. Refinancing is just a new mortgage in the same names.

Much of this is controlled by the decree of divorce. What does it say about ownership of the property?

He needs to get an Attorney to review the divorce decree and his options at this point.

He does not need to "buy" the house from her. They can simply transfer ownership but, again, the situation very well may be controlled by the divorce decree.

As noted, she needs to "buy" him out. She needs to get financing in her own name. At the closing, he will sign the deed over to her. While this is not an actual sale, it is a transfer of ownership.

It really doesn't matter what the divorce decree states since the bank does not have to honor it.

Quote:

Originally Posted by ScottGem

As noted, she needs to "buy" him out. She needs to get financing in her own name. At the closing, he will sign the deed over to her. While this is not an actual sale, it is a transfer of ownership.

It really doesn't matter what the divorce decree states since the bank does not have to honor it.

I'm thinking in terms of the divorce requiring the ex-husband to take some responsibility for the property - mortgage payments, repairs, taxes. If so, any sale/transer is covered by the divorce decree.

I don't know this exact situation, of course.

I was surprised to find that a court ordered divorce decree is not binding on creditors. So if the decree requires one or the other party in the divorce to maintain payments or payoff a debt or transfer property, etc. and that party doesn't do it, the creditor doesn't have to care.

To use an example. John and Mary get divorced. Mary gets the house as part of the divorce, but John's name is still on the mortgage and deed. Mary was given the responsibility in the divorce to obtain her own financing to get John off the mortgage and deed. Mary fails to do so. The lender is not bound by the divorce decree and doesn't really care. As far as it is concerned John is a part owner of the house and required to make payments. John can be sued to make the payments or the house foreclosed affecting John's credit.

John would have the right to sue Mary to recover any losses or inconvenience he suffered because of her non-payment. But he has no recourse against the lender.

Right, and I know the banks/mortgage companies are not bound by a divorce because they are actually a third party.

It is - in my mind - important to know how the Court addressed the marital residence. The wife - unless ordered to do so - does not have to allow him to buy her out and then has to obtain a new mortgage. Maybe she doesn't qualify. Maybe there's a relatively small balance due.

If the marital residence is held in both names there could very well be a reason and I think someone at least has to ask what that reason is.

Or maybe not -