After a Divorce, You May Still Be on the Hook for a Mortgage

By
Mortgage and Lending with WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 NMLS 244226

After a Divorce, You May Still Be on the Hook for a Mortgage

I met a friend of mine for coffee recently and he told me he had signed a Quit Claim Deed, releasing his ownership of the house he and his now ex-wife had bought years earlier and in which she lives.  He added, "I can go buy another house now, right?  That's what my realtor said."

"Maybe," I replied.

He was under the impression that a California Quit Claim Deed released him from liability on the mortgage attached to his ex-wife's house in addition to releasing his ownership interest.  I had to break the news to him that lenders don't necessarilly look at it that way.  Disposition of joint liabilities is a different legal issue than what is covered by a Quit Claim.  He was not very happy, to say the least because, like a lot of homeowners, more is owed on his former home than it is worth, which means a short-refinance or short-sale in order to remove him as a mortgagor.

So, what is the solution?  Address questions about outstanding mortgage obligations with a qualified family law attorney, preferably before the divorce is finalized.

Comments (2)

Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

the mortgage the two entered in to is still an obligation of both unless she refinanced to get his name off the mortgage in accordance to a divorce decree. Look at the divorce decree to study that judgement to know what he is or is not on the hook for. Still.

Jan 07, 2011 01:37 PM
Ed Gillespie
WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 - Folsom, CA

Hello, Andrew!  Thus, my suggestion to have mortgage liablity issues addressed through legal sources!

Jan 07, 2011 01:57 PM