Foreclosure Question

[Menecrates]

Long story short.

My ex-wife is the only one on my mortgage, however she signed a quit-claim deed over to me post divorce.  I am in credit rebuilding mode and working to bring my scores upto obtain a mortgage on a new home and don't want to assume the mortgage on my current property as it's under water.

If I find someplace new and move, let my current place go back to the lender, will I be liable for the foreclosure since I'm not on the mortgage, only on the deed?

[Lel]

Before you do anything that may come back to haunt you, you had better take another look at your divorce agreement.

It sounds like you got the house in the divorce. In almost all cases, there is some clause in the divorce agreement that requires the person who retains the property to refinance the loan in his or her name alone. The fact that the loan is upside down clearly makes this very difficult to do, but that does not mean that you are excused from this obligation.

Since your ex-wife is the only one on the mortgage, if you let the property go into foreclosure, or arrange a short sale or deed in lieu of foreclosure, then her credit will suffer greatly. It may appear that you have nothing to lose with any of these options, but if you were required to refinance or assume the responsibility for the payment of the mortgage by your divorce contract, then you would likely be considered to be in breach of the contract and would be at risk for litigation.

[MissMia75]

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@Menecrates wrote:

Long story short.

My ex-wife is the only one on my mortgage, however she signed a quit-claim deed over to me post divorce.  I am in credit rebuilding mode and working to bring my scores upto obtain a mortgage on a new home and don't want to assume the mortgage on my current property as it's under water.

If I find someplace new and move, let my current place go back to the lender, will I be liable for the foreclosure since I'm not on the mortgage, only on the deed?

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No, you will not be liable for anything financially as you did not sign the Promissory Note, that instrument is the only thing that could make you financially responsible. 

[Lel]

According to the terms of the mortgage, it is correct to say that in the eyes of the lender you are not responsible for the payment of the loan. But this does not nullify any subsequent legal requirements that may be specified in your divorce contract. That is, the bank won't come after you if you stop paying the loan, but your ex-wife and her lawyer might.

[GregB]

I'm assuming you were awarded the house in the judgement of dissolution. You should read that judgement very carefully. You will surely find that you guaranteed the court that you would not incur any liability to which your ex may be liable.

You would be open to your ex coming after you for damages. You would also be in contempt of a court order.

I strongly suggest you stay right where you are and never even pay a payment late.