Until Debt Do Us Part It’s very common in divorces for one spouse to transfer their interest in the marital home to the other.
If both spouses are listed as borrowers on the mortgage, transfer of the property alone will not remove a spouse from the mortgage.
And so, until proper steps are taken to clarify financial responsibility for the mortgage, divorce may not be the final and complete separation that a couple was hoping for.
This means that the assuming spouse would take over all responsibility for making the mortgage payments.
The non-assuming spouse would be released from all liability for repayment or future foreclosure.
Similar to assuming the mortgage, refinancing will completely remove the other spouse from all liability.
Once a divorce is finalized, and a divorce decree has been issued awarding the property to one spouse, the bank may be willing to allow that spouse to apply for a loan modification without the other.
If a loan modification is approved, the other spouse will be completely removed from the mortgage and released from all liability for repayment or future foreclosure.
This is all good advice, but those looking at a possible divorce which also potentially involves foreclosure should consult with a licensed attorney who can work with you to take advantage of available options, and help prevent future surprises or conflict.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker.