Legal Question in Real Estate Law in Virginia
Divorce - Deed of Trust/Mortgage Question
I am recently divorced, my ex-husband is paying the mortgage on a house we own together and need to sell.
He is threatening to walk away from it (no real equity in it) and tells me I will not be responsible, since my name is not on the deed of sale, its only on the DEED OF TRUST, and the mortgage payment is only in his name. Is he correct and I am not financially responsible if he walks away from the house and foreclose? Please let me know, I am concerned and don't want to ruin my credit. Thank you.
1 Answer from Attorneys
Re: Divorce - Deed of Trust/Mortgage Question
There are two key documents related to the mortgage: (1) The mortgage or promissory note, and (2) the Deed of Trust.
The key question is whether your name is listed as a co-borrower in the Promissory Note (Mortgage) or Loan document.
If your name is on the Deed of Trust as co-borrower, but NOT on the Promissory Note (or "loan" or "Note") then you are probably not legally responsible for payment of the mortgage.
But that does NOT mean the bank or mortgage lender might not come after you and hassle you. They might try to get you to pay anyway.
If you are not able to sell teh house, I would strongly recommend getting tthe banks' agreement to take the house back.
Your ex-husband should understand taht if the house is taken in foreclosure, and sold it auction, it will probably sell for a LOWER price than in a normal sale.
The bank or mortgage lender can then come after him (and possibly you) for the difference.
Just because the bank takes back the house does not mean that is the end of it. If they lose any money, they can sue you for the difference for the amount they lost.
You should explore (1) renegotiating the mortgage under new programs taht the government has been forcing on the banks. go to www.HUD.gov and find the help center for that.
(2) Try renting out the house or selling it under a rent-to-own contract. If you can negotiate lower monthly payments, it will be easier to rent it and cover the mortgage.
Many people may want to buy a house but cannot get credit right now. So if you sell under a lease-purchase (rent-to-own) you might get buyers more easily.
Since you will get a better price in a normal sale than in a foreclosure auction, the risk of losing money is not as bad if you can sell it normally. You have greater risk if it goes to foreclosure.
One thing I would suggest to anyone is to first make sure the mortgage is actually valid. There can be legal defects in the mortgage sufficient to cancel it. Take a look at www.MortgageFraudExaminers.com
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