How to change the ownership of a home after divorce

Mailbag

September 02, 2001

Dear Mr. Azrael,

Due to a divorce, I am in a position to buy out my ex-husband. The house is in California and I want to remove his name from the mortgage without refinancing. I alone have made all the payments for years, and I need to know the balance as of March 10, 1997. The loan has been bought and sold several times, and I am having difficulty obtaining that figure. Any suggestions?

I want to retitle the home in my name so that my grown children will inherit after I die, but I want complete control of the house while alive. How should I retitle it?

Diane Mayfield Ellicott City

Dear Ms. Mayfield,

As part of a divorce settlement, it's not uncommon for one of the parties to agree to convey his or her interest in their jointly owned home to the other.

The settlement agreement usually specifies when the conveyance will be made, how much money, if any, will be paid, and which spouse will be responsible for the property expenses and mortgage payments.

When both spouses have signed a mortgage, the spouse who transfers his or her interest is still liable for the mortgage debt. If the spouse who receives the conveyance defaults in paying the mortgage, the lender can foreclose.

Should the proceeds of the foreclosure sale be not enough to pay the balance due and all expenses of the foreclosure, the lender can pursue both parties for the deficiency balance. The parties are well advised to agree that the one who receives the property will refinance the mortgage in his or her own name at the time the deed is delivered. The joint mortgage will be paid off and the party who ends up owning the property will be solely responsible for the new mortgage.

You can't unilaterally remove your ex-husband's name from the mortgage. You either must convince the existing mortgage holder to formally release your husband from the mortgage debt (which the lender is quite unlikely to do), or you must refinance the existing mortgage. You also should make sure that your ex-husband has not allowed any liens to be placed on his interest in the property.

It appears that calculating the buyout price depends on what the mortgage balance was as of March 10, 1997. The lender that now services the loan should be able to provide a payment history. If one cannot be supplied, you can obtain an amortization schedule based on the original starting date of the loan. This schedule will show what the loan balance would have been during each month of the mortgage, assuming each payment had been made on time and in full.

As for retitling the home so that your children will inherit it, I am sure this is possible. You should contact an attorney or title insurer who is licensed in California to assist in preparing a deed in the form required by California law.

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