When a married couple purchase a home together they both agree to be jointly and severally responsible for repayment of that loan. When there is a divorce in place the Lender is not obligated to remove either party from the loan and they will not. What can be done?
- The house can be sold and proceeds can be split among the couple
- Either party can refinance the house (keeping the house and therefore being solely responsible for the loan
- If neither party qualifies for a new loan then one can quit claim deed the property to the other with the understanding that they both will still remain liable for the repayment of the note and is only relinguishing the interest on the property
The Negative for either party when a Quit claim deed is the only option is that if the house goes into foreclosure, the lender might be able to go after both parties even if one is not in the Title to the property. The other negative is that the party that quit claim deed the property may not be able to obtain a loan in the event either party may want to purchase their own home in the future.
Obtaining an Attorney is the best decision for both parties because an Attorney can help work out these problems based on facts and the financial information available.
Marisol Coll is a licensed Florida Realtor serving the Tampa, FL metro area. She helps buyer and sellers with their real estate goals. To reach Marisol call or text (text preferred) at 813-924-3707.