Title Transfer and Mortgage Responsiblity in Divorce

How is the title of a home normally transferred from one spouse to another during a divorce? What form or paperwork is normally processed to relieve one spouse from financial responsibility of the home without refinancing immediately?

1 Answer

Generally speaking, if title to a home is transferred as part of a divorce, the instrument used to effectuate the transfer is a deed; and, in most cases the specific instrument used is called a quit claim deed.  Typically, the form is prepared by the party or the representative of the party relinquishing their interest in the property and delivered to the party who is retaining their interest in the party.  At that point, the party keeping the property records the deed.

As far as relief from financial responsibility is concerned, the divorce decree and settlement agreement don't do anything for the party relinquishing their interest in the property as far as the outside world is concerned.  So, if your husband/wife doesn't make payments on the mortgage after the divorce is in place, your credit report will begin to accumulate derogatory entries.  If he/she stops paying entirely, the mortgage company holding the note can sue both of you.  If the lender garnishes your bank accounts to recoup on a judgment, you can always sue your former spouse to enforce the divorce decree.  Nonetheless, that divorce decree does not in any way nullify the original agreement between you and the lender.

Note to the person who asked the question:  if you're asking this question because you are in divorce proceedings without a lawyer, go get one!  If you're asking because your lawyer didn't explain this to you, ask the lawyer again.  When it comes to things like ownership of real estate and financial obigations the size of mortgages, don't lose your dollars trying to save pennies -- hire a lawyer!