Remove Name from Mortgage after Divorce

Q: During a divorce, do you know how to get your name off the mortgage, if you’re not the one staying in the house?

A: It is a common scenario when a divorce is pending. One spouse wants to stay in the family residence, the other agrees (usually cannot afford the mortgage on one income), and the two assume that the one who moves out of the home will no longer appear on the mortgage (which carries both spouses’ names). The fact is, ownership of real estate in Texas is, at least for family law purposes, in two parts. First, who owns the property. It is a simple matter to prepare a deed which conveys ownership from one spouse to another during divorce proceedings. Bam, ownership changed. The second part is, who owes for the property. Not so easy. If the mortgage is in the name of the party who is planning to stay in the house, no problem. If that person, after the divorce, pays the mortgage late or defaults, it will not affect the credit of the person who left the home.  The lender can only look to the person whose name is on the mortgage for repayment. However, if, as is usually the case, the mortgage is in both names, then the person leaving the home has fewer options. Unless and until the home is sold or a re-fi is done (can and should be done during the pendency of the divorce), the person who leaves the home may be in the position of no longer living in the home, not having access to information about any default, not having a say-so about whether the home should be sold or not, and having his or her credit affected by late payments or default.  The family court judge who grants the divorce does not have the authority to change this. The only entity with the authority to change it is the lender. In almost 28 years of practicing family law, I have never seen a lender (without re-fi or sale of the home) agree to remove anyone from a mortgage.  Bottom line is, if you are the person leaving the home, there must be a re-fi or sale to insure that you will not later be liable on the mortgage. And, if the divorce decree states that the re-fi will take place after the divorce, it is costly and mostly ineffective to try to enforce that provision.