Yesterday I got a call from a person who is friends with one of my clients. She had a question about her home and if one of the two people on the title could sign over the title to just one person.

I asked what the reason was for taking the person off the title and if they were on the loan. She said it was because she and her husband were getting a divorce and that they wanted to transfer title to the other.

I then asked to whom the title was being transferred? I told her that the title would change, but the loan would remain in both their names unless they refinanced. I said that is where the real risk was in a divorce.

If you transfer title, the person who doesn't have title to the home can still have their credit affected if the person goes in to default even if their name isn't on the title.

She told me that, that part was covered as the divorce papers state that the payments were the sole responsibility of the person on title. I said, the problem is the bank doesn't recognize the divorce papers. They go with the agreement that has already been signed by both parties. (Both parties are responsible for the loan, no matter who lives where.)

Another concern with keeping your name on the loan is that you may not be able to get a loan for a new home for yourself, because you are still responsible for the first loan on the house. So, if you find yourself in a divorce situation and neither party has the ability to refinance the home in their own name, it maybe in the best interest of everyone involved to sell the home.

For more information on a house in a divorce situation, I do suggest you talk to a good divorce lawyer as your future home buying ability and credit maybe on the line.



Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739

Photo courtesy of Kiomi