The owner wants to obtain a mortgage in his own name only

Ilyce Glink and Samuel J. Tamkin

Q: My ex-spouse will sign a quit claim at home. Will this remove his name from the mortgage? Her name is not on the loan promissory note, but she is on the mortgage and some of the other documents.

How can I remove his name from the mortgage document without refinancing the loan?

A: Let’s start with the difference between promissory note and mortgage document. They are two separate things. The promissory note is the obligation to repay the loan. The person who signs the promissory note is the person who had the credit to obtain the loan and who is legally responsible for repaying the amount owed. The mortgage document is the document that creates the lien on the property.

In your email, you said your ex-spouse is on the mortgage, but not the promissory note. The short answer is that the quitclaim will only transfer to you the ownership interest that your ex-spouse had in the home and nothing more. If your ex-spouse’s name is on the mortgage, their name will stay there until the loan is paid off or your lender is ready to release their name from the mortgage.

Usually, the easiest way to free someone from their mortgage is to refinance the mortgage. We understand that refinancing can be difficult, especially if you have to qualify for the loan on your own. And, refinancing can be expensive, especially now that interest rates have jumped so dramatically.

Since your ex-spouse was apparently not on the promissory note or on the loan, he has no personal liability for loan repayments. She will likely see little impact if her name remains on the mortgage. The lender will report on-time or late payments only to the name that is listed on the loan. It would be you and not your ex-spouse. If you make a late payment, your credit will suffer. Your ex-spouse’s credit should show no impact.

You can call your lender to see if they are willing to issue a mortgage discharge for your ex-spouse. We haven’t heard of any lender doing this except in a refinance, even if a judge has required it as part of a divorce decree or judgment.

Just be aware that you probably won’t call the company that issued the original loan. Most lenders sell their mortgages in the secondary market or present them in the form of securities. Thus, the service of the loan is provided by a loan management company. Service companies collect monthly payments, pay money for property taxes and escrow pound insurance they collect, and issue a lien or mortgage release after the loan is fully paid off. They can also do workouts or loan modifications, if needed. (We’ve seen a lot of this during the coronavirus pandemic and the Great Recession.)

Of course, they also initiate foreclosure proceedings to sell the home if a borrower fails to make the loan payments.

But they don’t usually do anything outside of what we would call “standard operations”. Once the quit claim has been registered and you can prove to the loan officer that you are the only person on the title to the home, you can call to see if they are willing to help you. . Don’t hold your breath waiting for this to happen.

Contact Ilyce Glink and Samuel J. Tamkin through their website, BestMoneyMoves.com.

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