Mortgages and Divorce

Discussion in 'Credit Talk' started by toromio, Aug 20, 2001.

  1. toromio

    toromio Well-Known Member

    Hi everyone, hope you all had a good weekend.
    Here's a question: In my spouse's divorce decree his ex is supposed to refinance the mortgage. During to divorce process, he filed a "quit claim deed" on the property. Now on his credit report the mortgage show up with the caption "not responsible". Exactly what does that mean? If he is no longer responsible for the loan, shouldn't it be a closed tradeline? Could we have it taken off? The loan amount is hurting our overall c to d ratio.
    If we can't take it off will the "not responsible" notation help our overall credit to debt ratio?
  2. jshimmer

    jshimmer Well-Known Member

    Every state is different but in most, divorce decrees do NOT eliminate financial responsibility. When the mortgage company approved the loan, there were two people responsible. Just because they were divorced does not mean that one person is no longer responsible. A divorce decree may state that "so-and-so is to refinance, yada yada yada", but it does NOT eliminate the financial responsibility. Only WHEN the mortgage is refinanced will one half no longer be responsible.

    There is legal recourse if someone does not comply with the divorce decree, but that's a totally different issue altogether.

    Until it's refinanced without his name, he remains financially responsible. If the mortgage company somehow agreed and he is actually no longer responsible, then all you need to do is dispute the account as 'not mine' and legally, it must be removed. But I find it difficult, if not impossible, to believe that the mortgage company would just 'let' someone become 'unresponsible' for a loan which they approved, in part, because he had legal responsiblity.

    Double check with an attorney in your state. In Michigan, divorce does NOTHING to financial responsiblity of mortgage, loans, etc.
  3. toromio

    toromio Well-Known Member

    That was my understanding of the issue as well, but the Experian report we got for him clearly states "not responsible". I don't understand that! Either he is, or he is not. If you have any ideas about the notation, please let me know!
    There was a huge fight about 4 months ago, because we got the annual statement of the account at our house. She said she was going to call the mortgage company, and tell them the he was no longer responsible for the mortgage, but I seriously doubt that her statements could or would affect the account without her refinancing. CONFUSED!!!
  4. Newcomer

    Newcomer Well-Known Member

    I have a dear friend who went through a divorce a few years ago. In the decree, it was stated that her ex was to refinance the loan into his name only. She never thought much of it, since he'd always been responsible with his finances. Well, when she went to purchase a home 2 years after the divorce, she found out that he not only had not refinanced, but was 1 step away from foreclosure. Divorce decrees do not dictate to creditors who is responsible. If his name is still on the loan, whatever state the loan is in will reflect his credit. Before you guys purchase a home, you need to get his name removed from the other loan. My friend eventually realized that her ex stopped paying the mortgage just to hurt her credit.
  5. toromio

    toromio Well-Known Member

    How was your friend's case settled? Did he eventually forclose, refinance? We are concerned about the debt to income ratio, not her defaulting. Given that info, could we submit a letter to go with the file stating that a quit claim deed has been given, the divorce decree clearly states she is to refinance, etc? Would that be of any use to the lender?
  6. jshimmer

    jshimmer Well-Known Member

    You never stated where, on the report, that this "message" appeared. What is part of the 'Consumer Statement' ?? If so, that means nothing.

    Again, until you receive binding, legal documentation FROM THE CREDITOR stating that the party is no longer responsible, he/she IS responsible (unless the loan is refinanced by the other party).
  7. toromio

    toromio Well-Known Member

    I am looking at the report now and it says "not responsible" under the Responsibility heading from the reoprt I got from Experian. What the f*** does that mean?? Is that a notation that she sent to them for the file?, or, Is it a notation indicating she has changed the status of the account??? This really doesn't make any sense.
  8. jshimmer

    jshimmer Well-Known Member

    I've never seen that. First, I'd dispute it as 'not mine' with the CRA(s). Second, I'd back it up by contacting the creditor and finding out what THEY have on THIER books as far as this is concerned. If they truly removed him from financial responsibility, then you're in the clear all the way around.
  9. $wealth$

    $wealth$ Well-Known Member

    Toromio -

    Does the your husband's divorce decree state that his ex must refinance? If so, you may have some legal options. If not, you may have to work with her to get her to refinance. There may be no benefit for her to refinance, so you may have to create one.

    If your husband is on good terms with his ex, it may be advantageous to see what will motivate her to refinance, it just may be monetary.

    Also, you may have additional options if this is a FHA or VA mortgage opposed to a conventional.

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