Can anyone tell me what happens to the person signing off on the property in a divorce scenario? For example, we have loan where borrower's are husband & wife. Borrowers get a divorce, husband signs quit claim to property and moves on. Bank now has mortgage still listing husbad. Spouse needs to modify terms. We do modificiation only in her name.

A refinance, new loan, is the only way to remove husband from mortgage? Does he still get reported to the credit bureaus? Also, is it possible to get a title policy only in the wife's name if the quit claim is recorded? Help....... I need to understand.

Thanks for any insight.

Since the bank is not party to the divorce, it does not affect your loan. Often one party agrees to assume responsibility for debts, but that does not take anyone off the hook as far as the bank is concerned. You should not have modified the note with only one of the original borrowers signing.

The cleanest way to do this is to have her apply for a new mortgage. You need to start from scratch. Once the quit claim deed is recorded, the new title commitment will show title vested in her alone.

This is secondary market and we have been told as long as we have the divorce decree and the quit claim we can modifiy a loan that is in hardship. She did not quailify for a refinance.

If this is a secondary market loan that you are servicing, then your investor makes all the rules when it comes to this issue. We can be of no help. We don't know their rules.

As a bank, if there is a hardship involved, the last thing that I would do is drop a obligated borrower from the loan. The fact that they are divorced is their problem not the bank's.

We have a situation where only one spouse is on the note and deed but both husband and wife signed the mortgage. Is it possible to remove the ex's name from the recorded mortgage?

It may be possible for the bank to do a release for the ex. Check with bank counsel.

But I caution you on doing this for the reason Randy stated above your post.

Better to do a refinance and make sure the remaining spouse qualifies.

I'm confused. For what purpose would you remove someone from an already executed mortgage document???? It makes no sense.

In Illinois, the non-borrowing spouse (or ex-as the case now is), signs the mortgage to waive their homestead right. I do not believe you have anything more to do CAR.