Divorce, Real Estate and Mortgages – What Nobody Tells You

I receive a lot of inquiries after divorces are finalized about real estate given to one spouse or another in a settlement or judgment, and how to remove the non-owner spouse from the mortgage. The typical scenario is that in the course of negotiating a property settlement, one spouse receives the house and by virtue of the property settlement, becomes solely liable for the mortgage. Later, for whatever reason, the spouse who received the home discovers that their former spouse’s name is still on the mortgage, and that the former-spouse not only is still liable for the mortgage but has access to the mortgage account! Lately, the question comes up frequently when a client is seeking a loan modification or attempting a short-sale. They discover to their horror that the former-spouse’s consent and participation is going to be necessary to finalize any sort of change to the loan. What happened,…

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