Divorce - A Quitclaim Deed Does Not Release You From Obligation On The Loan

It's a common misconception that if "I give her/him the house" you are done with the responsibility for the loan.

If you are signed on the loan, the lender will hold you responsible for the payments whether you have an ownership interest or not. "Giving the house" is often referred to as a "quitclaim". In a quitclaim deed, you are resigning from ownership of the house, but it doesn't take you off the loan. It is sometimes erroneously called a quickclaim deed.

The lender wants to keep everyone on the hook for the loan payments

The lender got you and your spouse to personally guarantee the payments, and they don't care if you're divorcing. All the future performance on that loan will follow you until that loan is paid off. The house either needs to get sold or the other spouse needs to refinance the loan into his/her name.

Your credit will continue to be impacted if the "in the house spouse" misses payments or if the house goes into foreclosure.

Sever those bonds to the mortgage!

Be extremely cautious of of divorce agreements that leave you on the loan, especially if the payment is realistically too high to handle.

If there is more owed on the house than it's worth, you should consider a short sale. In a short sale, the lender agrees to let the house sell for an amount SHORT of the payoff. In an ideal short sale, the lender forgives the deficiency and you never have to pay it back. It varies from case to case.

Getting rid of marital debt may be more important than keeping the marital home

Please have a frank discussion with your divorce attorney about liquidating the debt on the marital home. Do you really want to be dependent for years on your ex's ability and willingness to pay on the loan?

Please call a Realtor who specializes in short sales. You need a realistic assessment of the value of the house in today's current market. I have seen too many cases where the spouse got stuck with an unsellable house even though it appraised for much higher than what it can actually sell for. After months or years of trying to sell the house for "appraised value" the spouse figured out that they're stuck and need a way out to avoid foreclosure.

In the Louisville KY and the surrounding counties, please call Dave Halpern at (502) 664-7827.

 

Dave Halpern

Real Estate Broker, Louisville Short Sale Expert Realtors

(502) 664-7827

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Sellers looking for foreclosure help in Louisville, KY should call Dave Halpern, Realtor, Louisville Short Sale Expert Realtors, (502) 664-7827. I will dedicate to you all the time you need for a full explanation of the process. We are compassionate, caring and patient. I will listen to your needs and wishes and customize a strategy to meet your circumstances.

I will provide you detailed information about foreclosure options and short sales. We help dozens of sellers avoid foreclosure every single year in Louisville, Jefferson County, Oldham County, Bullitt County, Shelby County, Nelson County and Spencer County.

We can help. You have options. Call even if you think your house isn't sellable. Put an expert real estate agent on your side. Many testimonials available.

Dave also trains other Realtors how to perform successful short sales.

IMPORTANT NOTICE: LouisvilleShortSaleExpert.com is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit. We do not provide legal advice, you are encouraged to seek legal counsel. We cannot and will not charge upfront fees.