I am in the final stages of divorce. My ex & I recently accepted a binder to sell house. At the closing, one of the debts ..

Asked over 1 year ago - Staten Island, NY

One of the debts is mortgage. The last mortgage was a refinancing, my ex used this loan to satisfy his debts and in short, he ruined my credit, etc. I just read through the borrowers copy of the Mortgage. The loan is in his name. In the section entitled "Consolidation, Extension and Modification Agreement (Form 3172 1/01 (rev. 5/01) I am listed as one of the borrowers in paragraph VIII Obligation of Borrowers ..it states that anyone who signs the agreement as Borrower is fully and personally obligated to keep all promises, etc...On page 4, it reads as follows: By signing this agreemt, Lender & I agree to all of the above. NOTWITHSTANDING paragraph VIII Lender acknowledges that (my name) will not be personally liable for repymt...is this an "out" for my paying half of debt ?

Additional information

I am on the title and the deed as joint owner. Previous mortgages were in both names but after ruining my credit, he took this refinancing loan in his name. As I have a security interest in this property I was required to sign however, it his his obligation. After being robbed of so much money in this divorce/marriage, I reread the loan and remembered the loan officer's statement that this actually relieves me of the financial responsibility. Is this valid to support my claim to pay the loan at closing from his half?

Attorney answers (3)

  1. Susan Jo Civic

    Pro

    Contributor Level 12

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    Answered . This is not really a real estate/mortgage issue but equitable distribution in your divorce action. Anything acquired during the course of a marriage, both assets and debt, regardless of whose name they are in, are presumed to be marital and subject to equitable distribution. Thus, regardless of your obligation to the lender, if the debt was acquired during the marraige, there is a presumption that it is marital and should be shared. You say that the mortgage was used to pay off "his" debts, but if these were debts in his name but acquired during the marriage, in all likelihood those debts too are marital and subject to equitable distribution. Without more information it is impossible to give a better answer. However it is something you should definitely discuss with your divorce attorney and may be a point for negotiation. If the two of you can't agree on this issue at the time of closing, it is likely that the proceeds of the sale will be held in escrow by your or his attorney until you can agree.

  2. Maria C. Tebano

    Contributor Level 15

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    Lawyers agree

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    Answered . Without seeing the entire document and being able to ready it, no one on this site could possibly tell you what that provision means. If you are closing on the property, the lenders attorney is not going to deal with the issue of what you believe should come out of his share of the proceeds or yours. Do you both have real estate attorneys for the closing? Are you using the same attorney? If you are in the final stages of a divorce and your house is being sold, why hasn't your attorney dealt with this issue in the context of the divorce proceeding? Your best bet, is to have all proceeds held in escrow pending a determination as to how they will be divided between the two of you. Do not wait until you get to the closing table as purchaser and their lender have no interest in the battle between you and your spouse. All those issues should be resolved in advance of the closing.

  3. Lawrence Allen Weinreich

    Contributor Level 17

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    Answered . You should take all the documents and show them to your divorce attonrey and discuss the matter. This is an equitable distribution issue and you may be owed compensation for this.

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Divorce

Divorce is the process of formally ending a marriage. Divorces may be jointly agreed upon, resolved by negotiation, or decided in court.

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