You never realize the

Guest — Wed, 29 Aug 2007 21:37:54 -0400

You never realize the complications of marriage and divorce. It's souns like a mess, really. I hope that all involved hold up there end of the bargain.

Are Both Spouses Liable For Mortgage?

Rachel Small — Wed, 29 Aug 2007 10:25:41 -0400

A recent column in the Daily Herald of suburban Chicago brought up the issue of whether both spouses are liable for a mortgage when they split up.

The couple in question are going through a divorce and agreed that the wife would remain in the marital home until their child graduates high school. The wife would pay the monthly mortgage payment and after two years, she would either sell or refinance the home and split the funds from the sale.

Now the husband is renegging on the agreement since his friend warned him that if the wife fails to make regular mortgage payments, the bank could still come after him for payments. The friend is absolutely correct.

Both signatories to the loan agreement remain liable for payment and both could be sued. A written agreement to absolve the one spouse from financial liability, won't be recognized by the mortgage company. Banks wouldn't release the husband from his liability on the note. If the wife could qualify and applied for a new mortgage, then the husband's name would be removed. This isn't a practical or cost-effective solution if they might sell the property in the near future.

Another possibility is for the spouses to make an agreement that would be included in the divorce decree that if the husband has to make any mortgage payments, those funds would be deducted from the wife's portion of a property settlement, when the home is sold. It's unfortunate that this couple, of modest means, may both be sued if the wife fails to live up to her bargain to pay the mortgage.

Meanwhile the husband is demanding that his estranged wife either refinance the home or that they both sell the property now. Both of these demands may be impossible especially given the current downturn in the real estate market.

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You never realize the

Are Both Spouses Liable For Mortgage?