Inconsistent Mortgage Modification Requirements for Spouses

by Amy in Sarasota, FL and Ted in Browns Mills, NJ

Ask Kate about inconsistent mortgage modification requirements for spouses: Amy's bank has modified the mortgage without her consent three times since the divorce. The problem is she's still on the mortgage since her ex-husband has not refinanced the house. You'll hear from Ted whose wife is not a borrower on their house yet the bank is requiring her signature on the modification paperwork.

Ask Kate: Three Mortgage Loan Modifications Without My Consent

By Amy in Sarasota, Florida

Kate,

My ex-spouse of 8 years has done 3 loan modifications as if we were still married.

I was divorced in 2008. My ex was to refinance or do whatever necessary to remove me from liability of our marital home that he stayed in. He was to do this in a reasonable amount of time.

Well, after contacting the mortgage company and getting copies of the modification paperwork, I found out not only did he not refinance, he has done three loan mods with my name on them.

On one, my name is on the document but not on signature page. On another, my name is on signature page but my name is crossed thru.

The bank said they would take me off liability of the loan with a simple letter saying so. I told them that is not good enough because if my name is on the original note, I am still on the deed.

My ex wants me to sign a quick claim deed but I will not. After dealing with the bank for almost a year and them trying to get me to sign some documents to remove me from the loan, they finally said that he will have to refinance the home.

Thanks, Amy
Kate's Answer: Three Mortgage Modifications Without My Consent

Hi Amy,

What a mess. There is a lack of consistency among banks when it comes to modifying mortgages after divorces are final.

The cleanest break from the liability of your note (the debt) and deed (the ownership) would come through either the house being sold or the mortgage refinanced. But if your ex is not willing to refinance, you may need to re-open the divorce case to enforce the terms of the decree.

However, only an attorney could tell you if that is a smart move based on the existing terms of your divorce.

Divorce Decree Wish List

Speaking of attorneys, some of this mess could be avoided if divorce decrees required the spouse who was awarded the house to refinance the mortgage within a set period of time, thereby removing the other spouse's name on the note and deed.

Before that time, no changes to the terms of the loan or amount borrowed could occur without the signature of both ex-spouses. That means no loan modifications, no draws on home equity lines of credit, no cash-out refinances, and no 2nd mortgages.

Like I said, that's on my wish list. Pass it on to an attorney you might know. Maybe we can start a movement.

Modifying a Mortgage After Divorce

If it is of any consolation, you are not the first divorced homeowner to be kept in the dark while the bank modified a mortgage without first getting permission. For more help, please read my answers to borrowers in similar situations to yours at...

• If You Don't Own, Why Would You Choose to Owe


• Is it Wise to Refinance a Home in My Husband's Name


• Mortgage Assumption After Mortgage Modification


• Modify Your Mortgage with a Non-Borrowing Spouse


• HAMP Loan Modification and Your Credit After Divorce

Best wishes for getting the modifications behind you,

Ask Kate: Loan Modification Requires Signature of Non-Borrower

By Ted in Browns Mills, NJ

Hello,

We have a VA backed mortgage and became a few months behind.

The mortgage company stated that our only option was to do a modification loan. Unfortunately we have had to do this twice now.

They are asking that my non-borrowing spouse sign the modification documents. The first time, this was not the case. I was the only one who had to sign the paperwork. They sent the paperwork the second time and I signed the paperwork. I was the only one on it.

They contacted me recently and told me they had made a mistake and that since my wife was on the recorded mortgage, she has to sign also. My wife is on the deed to the house, but had never been on any loan. I am confused. On the paperwork, they have her listed as a borrower which she is not.
Kate's Answer: Loan Modification Requires Signature of Non-Borrower

Hi Ted,

Sigh. How inconsistent can banks be?

Dig out of your records the original modification paperwork, the promissory note, and the deed.

Make copies and attach a cover letter clearly explaining (as to a five year old) that she has never been on the mortgage, only the deed, and that the original modification did not require her signature.

Best wishes,

Have You Seen These Ask Kate Answers

• 2nd Lien Mortgage Modification Payment Quadruples After 5 Years
• 500k in Home Equity Yet Can't Refinance My Mortgage
• HAMP Loan Modification: Principal Forbearance vs Principal Forgiveness
• New Loan Estimate Form - Know Before You Owe

Got questions? You are invited to ask Kate for answers. Or post a quick comment or related question by clicking the link near the bottom of this page.

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