So Im looking for some help with a problem Im having. Im going through a divorce and have not been able to get anywhere with lenders with my question. I have several properties that will stay with me once the divorce is complete but my soon to be ex is on the loans. Im certain at this point that the court will rule me to refi. Has anyone ever successfully removed another person off a loan w/o refinancing? Has anyone ever been successful doing a release of liability? My current rates are 3-4% on my properties and would find it appalling to refi with rates as high as they are. Thoughts?
Isla Thompson: Following
Brody Hamilton: I have never seen it done any other way. Sorry thats not what you want to hear. 23 years lending but open if someone has a way around it?
Aria Tyler: You can ask the lender directly that question if they will do the processes for you. Its like doing a loan modifications and as you know these arw tough to Approve and Bank are only doing them since they where force too.
Mackenzie Nichols: Your Marital Settlement Agreement should address this and your spouses obligation to cooperate with transfer and any necessary paperwork, etc. and provide a mechanism to accomplish the task if they dont cooperate.
Kate Palmer: Doesnt matter. Divorce decree does not matter essentially. The loan is a separate thing and has to be dealt with on its own. That said I believe your only alternative is to either keep it as is (divorce decree can say who pays – but both parties remain responsible) or refi into your name.
Mackenzie Nichols: It does matter. Because youll need a contract you can enforce in order to accomplish any refinance, deed transfer, etc. Why would he agree to remain responsible for a mortgage to a property he doesnt own? You need to speak to a matrimonial Attorney. Take this suggestion. Or dont.
Kate Palmer: Mackenzie Nichols: what I mean its once you sign for a loan the bank doesnt really care what your personal situation is you are responsible for that loan. Many divorce decrees say the husband or the wife, whomever, is responsible for paying for the loan. They…See more
Jaiden Crawford: Do you have a signed quit claim from soon to be ex?
Isla Thompson: Quit claim does not get ex off loan
Ricardo Young: I will have a signed quick claim. As Cheryl said, it will not remove the ex from the loan
Demi Dunn: Ricardo Young: Quit claim is worthless
Emersyn Wood: It is probably spelled out in the loan documents you signed. Generally speaking you will probably have to refi although there are some loans that allow mods or assumptions which MAY allow you to remove a signor from the loan. I work in lending, just for reference to value of my comment.
Ricardo Young: I have talked to the banks and they say to submit a request to their special loans dept. I asked what their qualifications are to do a release of liability and they would not release that info.
Paxton Nichols: Finance companies dont care what courts say. Whoever is on the loan is responsible and will always be on all parties credit unless the loans are refinanced. Take this from personal experience
Declan Zimmerman: Not always true. I went through this and having good assets, convinced 2 banks to remove an ex from mortgages. If someones assets are not strong and credit shaky, that would make it tougher. Have a better chance with a credit union or small regional bank where things tend to be more personal. A large institution has their procedures and rules and hard to get them to vary from those procedures.
Katherine Lane::
Maddox Lee: for the purposes of another primary property if you have it on a divorce decree you can count the debt off your liability if the judge ruled the house be to her. And Visa versa. If the judge rules to give you the property and you dont want to refi, ask her to quit claim the property to you and she will still hold the note but not the title. You can refinance her out with the quit claim deed anytime after that. If you were to ever default she can sue you for damages.
Maddox Lee: To add another point, you can contact the lender and show proof of the decree and that you have been paying the mortgage. If your original note allows you to assume the loan terms try it that way!
Rafael Taylor: And she is a fool if she quit claims the deed without the refi.All of the responsibility, none of the upside
Elise Lawrence: Im a mortgage broker or of CA. Youll have to refi to get her name off, however you may be able to save on some fees if you have the existing lender handle the refi. Id get quotes from both the current lenders and a local mortgage broker.
Ricardo Young: So why would the banks Im talking to even suggest to submit a release of liability to a dept if it is not at all possible. Just them implying that there is a submittal process makes me think that there has to be away.
Eden Pearson: What kind of loans do they have? If SBA, you have to Refi. If conventional there is a way around it.
Ricardo Young: There all conventional with plenty of equity
Juliana Bowers: I have never seen a bank remove a person from a sfr residential loan without refinancing.
Elise Lawrence: I concur.
Elise Lawrence: I concur.
Giovanni Byrd: Seek an attorney but Id have her pay for you to refi or the cost associated with a higher rate on property. Your divorce attorney can help.
Jacqueline Hopkins: Cash out and run lol
Katherine Lane: After 34 years in Real Estate the lenders have no incentive to cooperate. They know you have no choice but to take a new loan. They have 2 on the loan now and their risk is more with only you on it. They may make you a sweat deal if you have the right approah but legally they really have no choice.
Ricardo Young: That is true in the business aspect of lending. That is why Im thinking that there is a serious flaw in our judicial system that requires me to refi to lose 10s of thousands of dollars on a divorce where the banks prophet. :/
Nolan Hogan: Fix ur marriage
Brantley Ferguson: My wife and I split, we quitclaimed, to each other and we simply left both names on the loans. Im not exactly fond of her but she pays her bills. The flip is also true. Its been about eight years and no problems.
Ricardo Young: I suggest that route but she was acceptable to the idea. I had even suggested having 6 months of the mortgage set aside for each one.
Demi Dunn: Divorce doesnt do that
Katherine Lane: So you did it do you think this is the way it is done 95% of the time or did you get lucky? So we put in Credit Unions andyou did it with strong financials it doesnt really matter for 95% of the people in houses who have double incomes to purchase a home. YEA THINK
George Pratt: If the properties are cash-flowing, consider forming an LLC and having the LLC buy them and getting an Umbrella Loan and finance all of them together. Im a mortgage broker. PM me if you need help.
Eden Olson: A good concept, but an LLC can be pierced. Once they define you own the LLC its over. If you put them in a 2-3 level trust they may not be able to pierce the veil of ultimate ownership. That also goes for your bank accounts as well (bank trust). You w…See more
Demi Dunn: No matter the outcome on money, have her give you a GENERAL WARRANTY DEED to all properties. Any other deed, and youre going to have to eventually go back to her and get her signatures. Are you willing to risk having to do that?
Brandon Brewer: Do you want to keep all of the properties? If you have enough equity what if you sold one or some of them to pay off the mortgage on the others? Then remove your exes name off the titles to the properties you still own. But she may want some of the money after you sell them so you all may have to figure that part out. Just trying to think outside of the box here.
Ricardo Young: This is what I have been considering for a back idea but wanted to exhaust my efforts to try to remove her name.
Katherine Lane: You are asking advice and only a lawyer is allowed to give legal information.
Katherine Lane: When you bought your properties you used a title company. The first thing is to go their and ask for thier legal department for help hopefully you got 1 of the majors. you hopefully used First American who is a great company, if so contact them today.
Owen Potter: The bank will not release liability. They usually will not cooperate nor do they care. They have two people on a loan who are paying and they dont care if there is a divorce or not. 25 years in this business. Have to Refi and state in divorce settlement how much the other person gets based on settlement of assets. Very rarely will a bank let someone off the hook or someone else assume a loan. You will waste more money refinancing. If there is equity sell the properties, divide the assets and move on
Hayden Carter: I tried doing this before but instead of refinancing the property. I did a subject 2 while the loan was in my partners name which allowed me to have full control of the property. You could always just keep it the way it is but that means shes not completely out of your life until that loan is paid off,etc. Thats what happened to me but still, I hope this helps…..Who knows, if you refinance maybe your interest will be lower.
Elise Lawrence: Unfortunately rates are at a seven year high and all signs are that rates will continue to slowly rise. Waiting to refi could end up being costly.
Hayden Carter: Elise Lawrence: yeah then dont do it try to work things out with her, maybe she will understand. My real estate attorney is in Virginia I would contact her but your laws in your state probably dont relate to VA.
Elise Lawrence: Hayden Carter: Im not sure what state the original poster is in. Im a mortgage broker so I would be able to handle this myself if I were on his position.
Jameson Keller: This may sound too easy but you have your divorce wife quick claim everything over to you?Have the loan companies re-write the loans only in your name and have her removed Im sure its been told to use it sometimes easiest is overlooked.
Demi Dunn: Okay, at the risk of sounding redundant…. What the hell is a quick claim?
Juliana Bowers: A Quit Claim Deed is for Title, not for liability on the loan.
Bryce Chambers: Number one check with YOUR divorce attorney not just a lender…Ok yes divorce has everything to do with it if you split assets 50/50 like in CA. In my case I had to prove to the court if I wanted an asset I had to refi and ad 50% equity based on appraisal to the loan balance and pay him off that way unless I had $1600000 to pay him off or I had a 401 k in that amount to pay him off or other assets he wanted. I had to buy my ex out of two properties he had to buy me out of one. There was a date given by the court to do it and if we didnt we would be in violation of a court order. He wasnt good and I wanted a complete sever of all assets which is normally the best idea. So I refinanced everything. The other big issue for you to consider is can you qualify for these loans and properties on your own make sure and dont weigh yourself down. Also check with your accountant. Here they told me if I didnt sell a property within 3 years of divorce I would have to recapture the tax on his portion of depreciation when it was sold. So also see a CPA and financial planner.
Ricardo Young: I have two divorce lawyers working for me and they are both telling me the same thing. A judge can not make me take on a debt such as keeping a house but a judge can force me to refi at a much higher interest rate that would cost me 10s of thousands. …See more
Bryce Chambers: Ricardo Young: divorce attorneys dont really tend to care about your financial well being or understand the tax implications I know mine didnt. They just want it over in their box. I definitely am not an attorney but i was forced to take a loan I di…See more
Ricardo Young: Bryce Chambers:Thank you. I will shoot you an email Sunday.
Juliana Bowers: I would demand that your attorney place a present value on the increased payment over the life of the loan & balance that with your overall settlement
Olivia Houston: Quick claim?
Kendra Ramsey: Can your spouse do a quit claim deed to their portion? Im sure that would cost you 1/2 of the value
Demi Dunn: Really bad idea
Kendra Ramsey: How about explaining your General Warranty Deed vs Quit claim deed?
Demi Dunn: The word WARRANTY. Notice it isnt anywhere in the so-called Quitclaim deed.
Demi Dunn: To begin with we need to establish that there are two basic entities in a deed. The Grantor (the person, group, or entity giving, selling, or conveying the property to); and the Grantee (the person, group or entity receiving, or buying the property.)…See more
Lola Miles: Just make sure you get a deed to the properties from her to you and it doesnt really matter if she is on the loan if your making payments
Lola Miles: If you have possesion of the home and the deed to the home then it doesnt matter if she is on the loan. Because you would be making the payments and controlling the property. Dont worry about refinancing if youre awarded the house in the divorce.
Kensley Harris: I certainly hope you are having an attorney guide you on the settlement. All the paperwork necessary will be drawn up. No you dont have to refi, but both names will remain on the loan. The banks like it that way.
Bryce Chambers: I would never leave both names in a loan my ex quit paying his part of the mortgages during the separation you NEVER know who u r dealing with until it happens to you get them off.
Beau Fleming: Every circumstance is different but there are ways
Bryce Chambers: You refi or sell if you dont qualify. Legally never keep your assets together after divorce.
Abby Hale: Most of the time , she would have to be removed in the divorce decree . Otherwise , you may need to go back to lawyer, or court .
Demi Dunn: Divorce doesnt do that
Abby Hale: It can be declared , in divorce decree
Demi Dunn: Abby Hale: doesnt work
Abby Hale: Your lawyer should know how to get this resolved for you .
Abby Hale: I have had a client that had to resolve this issue
Abby Hale: Hopefully , you have a real estate attorney