Legal Question in Real Estate Law in California

The lender doesn't care if you are on title to the home or not. (Well technically they do, because they generally want the borrower to own the property that secures the debt, and giving up title may be a default under the loan documents and/or deed of trust.) As far as responsiblity for the debt, however, you agreed to pay them back jointly with your husband and they will consider the debt to belong to both of you no matter who is on the title or whether you stay married or not. A quit claim deed (not "quickclaim") is simply one form of deed to convey title to property. Conveying your half interest to your husband will do nothing to change who agreed to pay the lender back. The only way to remove yourself from responsibility for the loan is for your husband to refinance to a loan in only his name. You would probably have to deed your half of the title to him at that point, but without a refinance, deeding him your half would do nothing.

I assume you are not represented by an attorney in the divorce action......if you were, it would be more appropiate for that lawyer to be answering these questions!

First, be sure that any changes in the ownership of property, and any changes in responsibility for debts such as mortgages, are all part of the overall property settlement that will be attached to, or written into, your decree of dissolution of marriage. Family law generally requires that both assets and debts of the marital community be divided equally, unless the couple makes an informed election to do something different. Your judge will decide how to divide the assets and liabilities unless you and your spouse request that a particular plan be made part of the judgment. Designing a marital property split that is both legal, fair and do-able is not an easy task, even for experienced family-law attorneys.

Next, please note that ownership of real property and liability for paying the mortgage on the very same real property are separate matters. Property can be owned by X even though Y is liable to pay the mortgage. You can't shed liability for a loan in your name just by giving ownership to someone else. The duty to pay is based on the signature on the promissory note, and you can't get rid of that duty by getting rid of the collateral.

Having said that, I'd add that it's my impression that most major lending institutions will modify loan terms to facilitate divorce property settlements. Once you have a firm idea how you want to divide your assets and liabilities, or in the process of coming up with a property settlement plan, you (and your spouse) should contact your lender to ask if they will re-write the note to accommodate your marital property settlement or dissolution decree.

So, it should be clear from the foregoing that if you quitclaim your interest, you will (a) give up whatever ownership interest you have in the house; but (b) still remain as obligated as before on the loan, at least unless and until you work something out with the lender.

At some point in the divorce proceeding, you'll need to know what the market value, total of loans and other encumbrances, and net equity of the house are, and ascertain whether you are (probably, but not for sure) effectively a 50% owner through the house being community property (or joint tenancy or tenancy in common, etc.). Only then can the two of you, with the court's assistance, come up with a fair property settlement. I hope you'll find out there is plenty of equity in the house. That will help in creating a property settlement and getting the lender's cooperation.

Simple answer if you quitclaim the house, you will not own property any longer. However you will have to get lender to agree to remove you from note. They probably won't do it unless your ex is financially solid enough to afford the loan himself. Until your lender agrees you are still responsible for this debt and obviously making the payments on time. This is something your divorce attorney should have taken care of. If you didn�t use one this is one of the reasons you should have.

Hope this helps and good luck.