Legal Question in Business Law in Virginia

Re: mortgage

I don't think the mortgage company did anything wrong, but your wife may have. If your wife is on the deed, she would have the power to take out a loan on the property WITH the CONSENT of all the other people on the deed. Using that loan, she would be entitled to pay off the existing loan or do anything else she wanted with the money. So the fact that she is not on the existing loan is not relevant, because refinancing would pay off that loan. There is nothing to stop her from paying off the loan, whether she is obligated under the loan or not. The existing mortgage company will be glad to take her money, whatever the reason.

However, she did NOT have the right to try to take out a loan on the house without the consent of ALL the owners of the house (which I believe means you and her together). Once the mortgage company became aware that you were not consenting, they should have stopped, but they must have assumed she was speaking for you both.

However, what she did was clearly try to extract the value of the house as a way of "gaming" the divorce. Because she is a co-owner, I don't see anything wrong outside of the divorce context. But a good divorce lawyer (which I am not) should be able to make hay out of her trying to pre-determine the decision of the divorce court by running off with the money. The judge will feel that that is the judge's decision, not your wife's decision by grabbing all the money from the home.