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ecliff3 · Sep 11, 2012, 06:53 PM

We refinanced our Michigan home with my wife as the principle on the mortgage. Which in essence seems to mean I sold the house to my wife. I did sign the mortgage, but my wife's name doesn't appear on the deed. Is the lien against our home still valid?

smoothy · Sep 11, 2012, 06:56 PM

Yes... and no refinancing it with her name on the loan doesn't mean you sold it to her... her name would have gone on the deed and yours would have come off.

Mortgage and deed are two different documents.

ecliff3 · Sep 12, 2012, 05:03 AM

Smoothly: the deed didn't change; her name was never on it, & still isn't ; the only indication is that I am a married man; her name doesn't appear.

smoothy · Sep 12, 2012, 05:10 AM

THe mortgage is just the mortgage... with her name on it she is now obligated to pay if you don't and yet, if you owned this house before the marriage she would have no claim to it in a divorce.

No the refinance does not make it appear you sold it to her in any way, shape or form... that would have required her name going on the deed... because the deed indicates who owns it, the mortgage only indicated who is liable to pay for it. In theory none of the people on the mortgage are actually required to own it or have their name on the deed.

You wouldn't get a refinance without them having a very real and very legal lien on the property. Technically in the process one loan gets paid off and the old lien released as a new lien for the new mortgage gets placed simultaniously. Its all part of the Closing process.

I've done that three times dropping my interest in half in the last 15 years.

Magpie95 · Sep 12, 2012, 05:17 AM

The deed is the legal document that state ownership of the property. The mortgage is the legal document that states who has financial responsibility of the loan against the property. You didn't sell the property to your wife. It sounds like you signed as a non-borrower spouse. This would indicate that only your wife's credit and income were used in getting approved for the loan. Is that correct? The lien is still valid. Lenders can't require you to deed the house a specific way. It is the right of the owner(s) to choose how to record the deed.

Magpie95 · Sep 12, 2012, 05:23 AM

Originally Posted by smoothy

THe mortgage is just the mortgage....with her name on it she is now obligated to pay if you don't and and yet, if you owned this house before the marriage she would have no claim to it in a divorce.

Or if he acquired it through an inheritance, gift or received it as payment of a claim, even after the marriage.

smoothy · Sep 12, 2012, 05:25 AM

Originally Posted by Magpie95

Or if he acquired it through an inheritance, gift or received it as payment of a claim, even after the marriage.

Exactly... I forgot to add that.

And if none of those conditions apply... then in the case of a dvorce under most state laws I am aware of... even if her name was not on it... its still considered marital assetts or as community property in states that have that law on the books...

Then there may be issues with probate should he die unespectedly, like in a traffic accident that wouldn't exist if they help title jointly in the correct manner.

Magpie95 · Sep 12, 2012, 05:43 AM

Originally Posted by smoothy

Exactly...I forgot to add that.

And if none of those conditions apply...then in the case of a dvorce under most state laws I am aware of...even if her name was not on it...its still considered marital assetts or as community property in states that have that law on the books...

Then there may be issues with probate should he die unespectedly, like in a traffic accident that wouldn't exist if they help title jointly in the correct manner.

Michigan is a survivorship state. So no worries there.
I could look up the specifics when I get into the office if OP needs more info.

ecliff3 · Sep 12, 2012, 06:26 AM

To Magpie95: That is correct. Only my wife's credit was used to get the loan, and we bought the hoiuse from my grandfather after we were married. Thankfully we have no plans to divorce. ;-)

ecliff3 · Sep 12, 2012, 06:28 AM

Thanks everyone for your responses. Very helpful!

ScottGem · Sep 12, 2012, 07:39 AM

This is kind of odd. Generally a lender will not issue a mortgage without the owner signing the note.

Magpie95 · Sep 12, 2012, 08:10 AM

Originally Posted by ScottGem

This is kind of odd. Generally a lender will not issue a mortgage without the owner signing the note.

No the person that signs the note, is the person who is taking out the loan. They don't necessarily have to hold title. Title is apart and separate from the security instrument. The confusion sometimes is that some states refer to the security instrument as a deed also. So, they may think it is the same as the deed recorded with the county by the title agent.

ecliff3 · Sep 12, 2012, 08:13 AM

Originally Posted by ScottGem

This is kind of odd. Generally a lender will not issue a mortgage without the owner signing the note.

I did sign the mortgage, I'm just not the principle on it so failure to pay won't effect my credit rating.

Magpie95 · Sep 12, 2012, 08:15 AM

Originally Posted by ecliff3

To Magpie95: That is correct. Only my wife's credit was used to get the loan, and we bought the hoiuse from my grandfather after we were married. Thankfully we have no plans to divorce. ;-)

Wonderful!

ecliff3 · Sep 12, 2012, 08:19 AM

The reason I asked is because, my wife's name is the same as my late grandmother's name with the exception of the middle initial. Grandma's name is on the deed as the wife of my grandfather who I bought the house from, but my wife's name isn't. I am, however, named on the deed as a married man.

I just wondered if the mortgage company made an error that made lien invalid.

Magpie95 · Sep 12, 2012, 08:21 AM

Originally Posted by ecliff3

I did sign the mortgage, I'm just not the principle on it so failure to pay won't effect my credit rating.

You are right. Only your wife would have signed the note because her income was used in obtaining the loan. You both signed the mortgage, you're signature being the non-borrowering spouse.

When the title is held in one person's name and the note in another; the non-borrower signs the mortgage and a few of the disclosures to eliminate the liability of the lender. You essentially were signing to say, "Yes, I am aware that my wife is taking out a loan on a property that I own." However, the note holds the financial responsibility ultimately.

Also, if this was a recent loan, may I suggest, reviewing the last Good Faith Estimate that the lender provided. Compare the fees on lines 801, 802 and 803 on your settlement statement. I am finding the most errors in under disclosing fees are made here. If the amounts on the statement are higher than the good faith, you are owed a refund from the lender for the difference.

Best of luck!

Magpie95 · Sep 12, 2012, 08:24 AM

Originally Posted by ecliff3

The reason I asked is because, my wife's name is the same as my late grandmother's name with the exception of the middle initial. Grandma's name is on the deed as the wife of my grandfather who I bought the house from, but my wife's name isn't. I am, however, named on the deed as a married man.

I just wondered if the mortgage company made an error that made lien invalid.

If your grandfather sold the property to you, then your grandmother's name should not be on there. Are you sure she is listed with you on the title and not just part of the chain of title? With their names being so similar, I would contact the title agent. If a mistake was made, be sure they don't charge you for re-recording it!

So, does it say: "John Doe, a Married Man and Grandma's Name"

ScottGem · Sep 12, 2012, 08:39 AM

Magpie has given you some very good info. As long as you signed the mortgage, that validates the lien. But your grandmother's name, still being on the deed is worrisome.