How To Get An Ex‐Spouses Name Off of A Mortgage

DIVORCED?  DIVORCING?
HOW  TO  GET  YOUR  NAME  OR  YOUR  EX’S  NAME  OFF   OF  A HOME  MORTGAGE
by: Jonathan Goldsmith Cohen
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According  to  the  CDC,  the  most  recent  Census  data  from  2011  states  that  45%  of   marriages  in  the  United  States  end  in  divorce.    Today,  December  2,  2014  the  New   York  Times  said  that  this  number  is  holding  steady  or  going  down  slightly,  but  not   increasing.  As  of  April  2014,  Bloomberg  News  reported  that  65%  of  Americans  own   their  own  homes.  When  a  couple  divorces,  especially  in  today’s  real  estate  market   where  they  have  little  equity  or  no  equity  in  their  home,  they  may  be  divorced  but   the  obligation  of  a  home  mortgage  can  live  on  for  far  longer  than  a  marriage,   destroying  your  credit  in  the  process.

Deeds  and  Mortgages.  How  Do  They  Differ?  

First,  let’s  talk  about  the  difference  between  deeds,  mortgages,  and  mortgage  notes.   If  you  are  on  the  deed  to  a  home,  you  have  an  ownership  interest  in  the  property.    If   you  are  on  the  mortgage  note,  then  you  are  personally  liable  for  the  mortgage.  If  you   have  signed  the  mortgage  but  not  the  note,  you  are  not  financially  liable  for  the   mortgage.

How  To  Get  An  Ex-­Spouses  Name  Off  of  A  Mortgage

Let’s  back  up  for  a  second  and  talk  family  law.  Marital  Settlement  Agreements  (MSA)   and  Property  Settlement  Agreements  (PSA)  are  different  names  for  the  same   document.  An  MSA  sets  forth  the  terms  and  conditions  of  a  divorce.  A  Judgment  of   Divorce  is  entered  in  the  court  and  is  a  brief  document.  The  MSA  is  then  attached  to   the  Judgment  of  Divorce.

The  first  thing  to  do  is  review  your  MSA.  Is  an  ex-­‐spouse  or  are  you  waiving  your   right  to  any  ownership  interest  in  the  home?  If  so,  then  there  needs  to  be  a  deed   transfer  first  to  the  ex-­‐spouse  who  is  retaining  an  ownership  interest.

  1. Refinance:  If  you  are  fortunate  to  have  perfect  credit  and  equity  in  your   home,  a  refinance  would  remove  an  ex-­‐spouse’s  liability  from  the  mortgage   note.  Also,  the  ex-­‐spouse  would  need  to  transfer  their  ownership  interest  in   the  property  to  you.
  2. Mortgage  Modification:  If  you  or  your  ex-­‐spouse  is  unable  to  refinance,  the   only  way  to  remove  an  individual  from  their  liability  for  a  mortgage  without   bankruptcy  is  to  get  a  mortgage  modification.

    BUT:  In  order  to  obtain  a  mortgage  modification  with  only  one  of  the  ex-­‐ spouse’s  names  on  the  new  mortgage  note,  the  divorce  settlement  must  state   that  the  spouse  not  applying  for  the  mortgage  modification  waives  all  rights   in  the  marital  home.  If  your  MSA  says  that  a  spouse  is  to  receive  a  share  ofthe  proceeds  when  the  marital  home  is  sold,  then  the  mortgage  cannot  be   modified  into  one  spouse’s  name  only.       In  order  to  modify  a  mortgage  and  get  an  ex  “off  of  the  mortgage”  there  must   be  documentation  stating  that  the  ex-­‐spouse  waives  their  interest  in  the   home.  If  your  MSA  states  otherwise,  some  post-­‐divorce  work  in  the  family   court  is  necessary  to  modify  your  MSA.  If  an  ex-­‐spouse  has  waived  their   interest  in  the  property,  the  mortgage  can  be  modified.

  3. Bankruptcy:  Filing  a  personal  bankruptcy,  whether  a  Chapter  7  or  Chapter   13  discharges  your  liability  on  a  mortgage  note.    

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