Thanks Angelo ... that's not something that would normally come to mind.  Do attornies normally advise clients about this?

I agree a quit claim deed in the divorce decree does not let automtically release the other party from their liability on the mortgage.  I have seen in the past where the party that receives the home either is required to refinance or assume the existing loan.

Larry, As they say, some divorce attorneys are still "practicing" and their clients find out too late.  The better attorneys cover this but I still meet with clients that are unaware of this issue until I mention it. 

Carolyn, That certainly is the safest way of dealing with this issue.  Unfortunately, sometimes the person keeping the home is depending on child support and income from a new job to cover costs and does not yet qualify for a mortgage.  In those cases, a time limit is often factored in to trigger a sale if the home is not refinanced within a fixed number of months.  Practice, practice, practice.

A apart of me is surprised that the courts are not able to force the creditor to release a party from a debt as in the above case with a divorce and one party is give sole ownership / control over a real estate property.

Sean Allen

Why should a lender release one of the parties from their obligation just because they are now divorced?  The courts have no right to force a lender to do so in a free country. 

The responsibility for keeping the loan current may be that of the spouse who agreed to it in the divorce settlement.  If that party reneges, the other spouse can take legal action.  That doesn't change the fact that when the couple originally took out the loan, they agreed to be responsible for it jointly and severally, meaning together and individually.  That obligation is not changed by divorce.  (Just my opinion - I'm not a lawyer.)

Sean & Brian, Bottom line, better to know and negotiate an immediate refinance or have penalties or some protection built into the settlement.- One option could be to have the proceeds from eventual sale adjusted by $XXX for any mortgage payment that is late by ____ days.  And of course, I am just an observer, not an attorney so take my comments for what they are worth.  Have a great day!