Posted by Malbrough_LA on 9/19/13 10:41am
Msg #485094

What is going on here?

Yesterday was the fourth time this month that someone came in asking for a notarized letter to a mortgage company to remove their name from their mortgage. After questioning the individual regarding exactly what he was trying to accomplish, the response I got back sort of worried me. He was under the impression that to remove his name from the property, all he had to do was send a notarized letter to the company asking them to remove his name. No quit claim...no act of donation...no refinance....nothing. I contacted the company. The notarized letter is to remove him from the account, but of course he is still liable for 50% if a default occurs. It just removes him from the account as a person who can make changes to the account..... OMG why would you want to do this to yourself?! Because the companies in question have made it sound like this "solves the problem" of removing oneself from a mortgage. No, no it does not.

All of the properties in question have involved a divorce between the parties listed on the mortgage. Why is this misinformation being sent out to constituents? Every single one of them had concluded that a notarized letter would remove their names as a liable party from the mortgage.

Anyone else seeing this or hearing this?

Reply by Moneyman/TX on 9/19/13 10:46am
Msg #485096

Is is possible that all the people that you have seen requesting this have the same law firm or attorney for their divorce? I'm not sure if it is an attorney giving out incorrect advice but since they all seem to have a recent divorce in common I thought I might ask.

Reply by droman_IL on 9/19/13 10:58am
Msg #485101

I think if part of a divorce proceeding, the court awarded the property to just one individual, then they might be under the impression that is all that is needed (because the court ordered it.) But you are correct that they are still liable. The "winner" of the property has to refinance and put the loan solely in their name. If they don't and they default, the lender can still come after the other divorced spouse. It happened to a family member of mine, who ended up having to claim bankruptcy to avoid paying for the ex's house.

Reply by ToniK on 9/19/13 11:21am
Msg #485111

Im going through a divorce and my soon to be ex husband spoke with an Attorney about a loan he co sign with me. The Attorney told him that I should write a letter and get it notarized releasing my husband from the responsibility of paying the loan should I ever default. I actually laughed at that because the company who the loan is with wont even care about that. They have a legal right to contact the co-signor if payment is not made. But yes Attorneys are giving out that information (at least from my experience). Best bet would be for me to either refinance loan without him or ask the company what does it take to get rid of the co-signor. My loan is a student loan though.

Reply by Darlin_AL on 9/19/13 11:28am
Msg #485115

negligent divorce attorneys or do it yourself divorces? n/m

Reply by ToniK on 9/19/13 11:44am
Msg #485119

Re: negligent divorce attorneys or do it yourself divorces?

Who knows. Husband Attorney was through his Legal plan he has from his employer.

The Attorney I hired isnt through this legal plan. But the Attorney I did talk to (through the legal plan) had gave me some advice on filing some docs at the courthouse, was wrong. I had the courthouse clerk tell me that the way the Attorney told me to file was not accurate. You would think these Attorneys would know what the hell they are talking about...right? lol

Reply by Yoli/CA on 9/19/13 12:08pm
Msg #485127

Re: negligent divorce attorneys or do it yourself divorces?

The question is, are those "attorneys" through the legal plan actually attorneys or are they law students who should be working under the guidance of an actual licensed attorney? Kind of like doing a residency ... do law students do that? Personally, I have no experience with a legal plan or its staff member. Just throwing it out there for comment.

Reply by jba/fl on 9/19/13 12:13pm
Msg #485128

Re: negligent divorce attorneys or do it yourself divorces?

Sure, law firms have interns, paralegals, associates, etc. Probably the paralegals know the most. JMHO

Reply by sueharke on 9/19/13 1:21pm
Msg #485147

Re: negligent divorce attorneys or do it yourself divorces?

A retired nurse once said that the last person who graduates from medical school get to use the title M.D. He or she who graduates from law school and passes the bar get to use the title Attorney-at-law. Her advice was to ask the person where he or she graduated in the graduation class (top 3, top 10, other) before deciding to use this professionals services.

Reply by Malbrough_LA on 9/19/13 2:19pm
Msg #485167

Well said, Sue. Very well said indeed :) n/m

Reply by Malbrough_LA on 9/19/13 1:40pm
Msg #485152

Checked with the client today and confirmed. This is a

couple that is trying to avoid having to go to court regarding their separation and divorce. Word to the uninformed...never do this. Procure an attorney. The money saved now is NOT worth the cost later down the line!

Reply by Yoli/CA on 9/19/13 11:29am
Msg #485116

Sounds like some of these attorneys should be taking refresher courses. Or, maybe these co-borrowers/co-signers should be speaking with someone in authority at the lender.

This misinformation may lead to additional litigation. Is this the framework for job security ... for the attorney??

Reply by Teresa/FL on 9/19/13 11:37am
Msg #485118

I have never heard of this

I have done a few "Loan Assumption Closings" where the spouse retaining the property has assumed sole responsibility for the loan. Of course, the loan needs to be assumable and the lender has to agree to the assumption.

I know of no other way, besides an outright refinance or purchase transaction that would absolve a current borrower/titleholder from future obligation to pay.

Reply by Malbrough_LA on 9/19/13 2:14pm
Msg #485159

Feel free to correct me if I'm wrong :)

In an assumption of mortgage the seller remains liable to the existing mortgage lender unless the lender agrees to release the seller from further liability. What this guy would actually be doing is donating his share of the property to his soon to be ex-wife because "I don't want to ever deal with her again; she can have it all as long as she leaves me alone!"

Apparently this guy is tapped out and done

Reply by Teresa/FL on 9/19/13 10:10pm
Msg #485238

Re: Feel free to correct me if I'm wrong :)

<<In an assumption of mortgage the seller remains liable to the existing mortgage lender unless the lender agrees to release the seller from further liability.>>

That's correct. An assumption would be one way of being removed from title and from any legal obligation to repay the loan, as long as the lender approves the assumption and releases the "seller" from liability. It sounds like your guy is wanting to weasel out of any liability for repayment of the loan just by putting in writing that he wants to be removed from title. I don't believe any lender would accept this as legal.

Reply by Lisa Cirillo on 9/19/13 12:03pm
Msg #485124

I am going through this right now. My ex husband showed up to court with a letter that states I am no longer on the account. He told his lawyer and my lawyer that I am no longer on the mortgage but I am still on the deed. What? So me being me, called the bank and asked questions, which I already new the answers to. Just wanted to make sure.

The bank informed me that that only way to come off that mortgage was to sign a Quit Claim Deed and send in a copy of the divorce decree. They need the divorce decree to see which party was awarded the property in question. I already knew this but had to make sure since the ex produced that one little piece of paper.

Perhaps these people are not talking to their attorney and just taking the other spouses word on this. The bank will tell them exactly what my bank told me.

Oh and by the way, I found out the creeper is in foreclosure and I could be on the hook for the dollars due!! Nice, he somehow got me off the account so they wouldn't notify me.

Reply by droman_IL on 9/19/13 12:56pm
Msg #485143

Even if you are off the Deed, you're still on the Note!

Which means you have no entitlement to the property, just the debt! He would have to refinance to put the loan in his name only, or sell the property to new owners so the loan with both your names on it can be paid off.

Reply by Lisa Cirillo on 9/19/13 1:46pm
Msg #485153

Re: Even if you are off the Deed, you're still on the Note!

Exactly what I said but the ex seems to think he knows more. Oh well, I have my attorney working on this. The bank did say they will refi the property but they want the docs first.

Reply by Malbrough_LA on 9/19/13 2:16pm
Msg #485163

You hit the nail on the head! Hence my issue with this. n/m

Reply by Christine/OK on 9/19/13 12:52pm
Msg #485142

Ryan, Thank you for sharing. Helpful to know! :D n/m

Reply by Malbrough_LA on 9/19/13 2:18pm
Msg #485165

You are welcome! not sure if it's happening in other

states, but just wanted everyone who actively reads here to be aware of what I'm currently seeing and the implications for your constituents.