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  • Husband left wife off of refinanced mortgage

    This is a situation that popped up on an internet forum, and it is
    therefore rather vague.

    A woman (state unknown) says when she and her husband recently
    refinanced their mortgage, her husband "inadvertently" left her name
    off the papers, so the mortgage is in his name only. It's been so long
    since I refinanced that I don't remember the particulars. Thus the
    questions. :-)

    Must the names on the deed be the same as the names on the mortgage?
    Has he effectively removed her name from the deed by removing her from
    the mortgage? It's not really that easy, is it? Wouldn't she have to
    sign something agreeing to remove herself from the deed? (Of course,
    I'm sure she signed whatever was placed in front of her, so it's
    possible that she did, in fact, sign away her ownership if that's what
    he intended.)

    Or could this mean she is still a co-owner, but he is the only one
    responsible for the actual mortgage?

    Is this something that could happen accidentally? I assume the
    financial institution is not under any *obligation* to point out that
    the names on the original mortgage are not on the new one, and confirm
    that this is indeed what the customer intended. But is it customary
    that they would do so anyway?

    Thanks for any input.


  • #2
    Husband left wife off of refinanced mortgage

    In article <[email protected]>,
    [email protected] wrote:
    Or could this mean she is still a co-owner, but he is the only one responsible for the actual mortgage?
    As it stands, that sounds like it is the case--she owns half,
    but has zero responsibility for the payments. Best of both
    worlds.
    Is this something that could happen accidentally? I assume the financial institution is not under any *obligation* to point out that the names on the original mortgage are not on the new one, and confirm that this is indeed what the customer intended. But is it customary that they would do so anyway?
    This was most likely a mistake either with the closing company
    or the financial institution. There is no way they want to get
    in a situation where if the loan goes bad, the cannot repo the
    house. Depending on how long ago this was, there is a chance
    that it will be caught in a loan review or audit, especially
    if the loan is going to be sold at some point. In most home
    and loan closings these days, people agree to willingly correct
    any errors that were made, so it is possible that they will
    come back and ask this woman to sign the paperwork.

    -john-

    --
    ================================================== ====================
    John A. Weeks III 952-432-2708 [email protected]
    Newave Communications http://www.johnweeks.com
    ================================================== ====================

    Comment


    • #3
      Husband left wife off of refinanced mortgage

      [email protected] speculated:
      A woman . . . says when she and her husband recently refinanced their mortgage, her husband "inadvertently" left her name off the papers, so the mortgage is in his name only. * * * Must the names on the deed be the same as the names on the mortgage?
      "must" in the sense that the lender would not have agreed (although,
      on the facts as you hypothesize them, the lender did agree) to lend
      unless all co-owners agree to the mortgage or "must" in the sense that
      the jurisdiction's law requires that a mortgage lender not make a
      mortgage loan unless borrowers identified in the mortgage are all the
      persons named in the deed as owners?

      Generally speaking, if A and B jointly own a parcel of real property,
      B may mortgage B's interest in the property (subject, of course, to
      whatever may be the relationship/agreements between A and B
      determining their obligations to one another, including whether A and
      B are husband and wife who do/don't own the property in "entireties"
      form or in "[equal] tenancy in common" form or as, respectively,
      [100-x]% and x% "tenants in common" or who may have granted/recorded a
      power of attorney to one another authorizing B to act for both A and
      B; etc., etc.).
      Has he effectively removed her name from the deed by removing her from the mortgage?
      Not if the only relevant facts are those you've so far stated.
      It's not really that easy, is it? Wouldn't she have to sign something agreeing to remove herself from the deed?
      The most common way "to remove [ones]self from the deed" of real
      property co-owned with another is to convey one's interest to the
      other or to some third-person by deed or (depending in what form the
      property is owned) by comparable instrument or (less commonly) to
      consent directly or in effect (e.g., by defaulting) to a judgment made
      and docketed by a court having jurisdiction achieving the same effect.

      Especially the first alternative (conveyance by deed) is "easy" at
      least in the sense that pretty much any kind of deed is comparatively
      easy to draft, sign, and, if it is to be recorded, acknowledged before
      a notary or like officer.
      (Of course, I'm sure she signed whatever was placed in front of her, so it's possible that she did, in fact, sign away her ownership if that's what he intended.)
      It is also possible that her husband forged her name to the deed and
      was also able to find some notary or other person authorized to take
      acknowledgments mistakenly or, possibly, deliberately wrongfully to
      (purport to) confirm that she acknowledged her signature, or that her
      husband forged a notary's signature and stamp or seal (i.e., chose to
      open himself to possible prosecution for one or more felonies), too
      and it is possible that none of this occurred.
      Or could this mean she is still a co-owner, but he is the only one responsible for the actual mortgage?
      Yes, if that is what he and the mortgagee agreed and if that is what
      the mortgage says. However, even your term "only one responsible for
      the actual mortgage" might be somewhat misleading, as a practical
      matter, if foreclosure results and the wife is then subjected to the
      inconvenience and expense of having to act to protect her interest in
      the property.

      It is also possible that the mortgagee knew that both the husband and
      wife owned the property and that the husband as mortgagor and the
      mortgagee new/agreed what they were doing, possible that all three
      agreed in some direct way, possible that the bank made a mistake in
      the sense that it would not have agreed to and accepted a mortgage
      just from the husband if it had not failed to be diligent in
      confirming who owned the property and yet that it did fail to
      determine that the wife was an owner, or that other possible scenarios
      apply.
      Is this something that could happen accidentally?
      "could" in the "anything is possible!" sense compared with what is
      probable?
      I assume the financial institution is not under any *obligation* to point out that the names on the original mortgage are not on the new one, and confirm that this is indeed what the customer intended. But is it customary that they would do so anyway?
      Imagine two worlds inhabited by the "same" husband (H) and wife (W)
      who own the "same" parcel of real property and in which there is the
      "same" bank (B), worlds identical in all respects except one and that,
      in world1, H and W have jointly borrowed $# from B and jointly given
      B a mortgage on the entire the property and, in world2, it was only B
      who borrowed $# and who gave B a mortgage on the property, then answer
      for yourself:

      All other things being equal, is W comparatively better or worse off
      in world1 or in world2? What to you imagine the difference being (for
      either W or H) between world1 and world2 if in the second of these
      alternatives the bank had not said to H that both H and W had not
      signed the mortgage?


      Thanks for any input.

      Comment


      • #4
        Husband left wife off of refinanced mortgage

        OP ([email protected]) wrote in part:
        A woman (state unknown) says when she and her husband recently refinanced their mortgage, her husband "inadvertently" left her name off the papers, so the mortgage is in his name only. [...]
        OP wonders about the effect of the omission and suspects correctly that
        there are some omitted particulars that would matter.

        Let's have a go at it. First, it might help to clear up some language.
        I will be sufficiently imprecise as to give any property lawyer a
        conniption fit.

        Deed: document that transfers some interest in real property from a
        party or parties to someone else. (e.g., A owns Greenacre outright. A
        sells Greenacre to B. B gives A three pigs and a cow, and A gives B a
        deed reading, "For value received, A transfers Greenacre to B.")
        Title: who owns an interest in real property (e.g., prior to the above
        example, title to Greenacre resided in A. After the above example,
        title resides in B.)
        Recording: Nope. Not going to discuss recording. Too painful.

        Importantly for purpose of language, the owner of a parcel has title.
        A deed changes the owner.

        Note: When C borrows money from D and promises to pay it back, C
        (borrower or debtor) gives D (lender or creditor) a note.
        Mortgage: When C borrows money from D to buy a house and promises to
        pay it back, C gives D a note and C (mortgagor) also makes a mortgage
        in favor of D (mortgagee). The mortgage is security - a lien, allowing
        D to sell the house in case C doesn't pay on the note. Vernacular use
        of the term mortgage usually refers to the note, not to the lien.

        Title theory of mortgage: E borrows money from F in order to buy a
        house and makes a mortgage in F's favor. Title is in lender F until
        the note is paid off, at which time title passes to E.
        Lien theory of mortgage: E borrows money from F in order to buy a
        house and makes a mortgage in F's favor. Title is in E. If E defaults
        on the note, F goes after him.

        JTWROS: Husband and wife can buy things together under a special joint
        ownership called joint tenancy with right of survivorship (JTWROS).
        Husband dies, wife owns the whole thing - doesn't inherit half; just
        owns the whole thing. In a title theory state, mortgage by one and
        only one spouse can bust a JTWROS. (JTWROS is not limited to spouses
        or home purchases. You can have a JTWROS bank account with your kids,
        for instance.)

        Rule in Shelley's Case: Inapplicable here, but you always mention the
        rule in Shelley's Case. Something about words of limitation,
        eighty-year-olds having babies and not granting stuff to your kids in
        your will that they would have gotten anyway if you forgot to write out
        a will.

        So, before the refinancing:
        Husband and wife borrowed to buy House and jointly owe outstanding
        principal to Bank A. Bank A has recorded a mortgage reflecting its
        security interest in House.

        Refinancing occurs, in which wife's name is "left off the papers." OP
        suggests that wife might have signed something.

        Husband now borrows from Bank B (or maybe Bank A; you don't have to go
        to a different bank when you refinance) and uses the proceeds to pay
        off the outstanding principal on the original note. This satisfies the
        original mortgage, so Husband can trot down to the county recorder and
        have that lifted. At the same time, either husband alone or husband
        and wife together make a new mortgage in favor of Bank B. Bank B also
        trots down to the county recorder.

        Since my memory gives out here (for illustration, I don't remember what
        TTIP stands for but vaguely remember that I should), let me step out
        and invite someone with actual understanding of title, concurrent
        estates and conveyance to jump in.

        Comment


        • #5
          Husband left wife off of refinanced mortgage

          [email protected] wrote:
          A woman (state unknown) says when she and her husband recently refinanced their mortgage, her husband "inadvertently" left her name off the papers, so the mortgage is in his name only.
          That's very unlikely. Any lender with half a brain wouldn't allow it
          unless allowed by state law.
          Must the names on the deed be the same as the names on the mortgage?
          Normally the rule is that the people giving the mortgage must be all
          the people who own the property. Otherwise the mortgage holder
          wouldn't be able to sell the property in case of default.

          I suppose it's possible that a state law allows the name of one spouse
          to mean both of them, but I'd guess it would be unlikely.
          Has he effectively removed her name from the deed by removing her from the mortgage?
          No, she's still an owner. The deed and the mortgage are completely
          different documents.

          What he's done is to make it so the bank can't foreclose on her part of
          the property if she defaults.
          Or could this mean she is still a co-owner, but he is the only one responsible for the actual mortgage?
          It depends whose names are on the note, which is the formal document by
          which borrowers owe money to a lender. The mortgage only gives
          security and is a separate document from the note. Whoever signed the
          note owes the money.
          Is this something that could happen accidentally? I assume the financial institution is not under any *obligation* to point out that the names on the original mortgage are not on the new one, and confirm that this is indeed what the customer intended. But is it customary that they would do so anyway?
          It's in the lender's interest to have all debtors and all property
          owners sign the mortgage. Otherwise the mortgage is essentially
          useless.

          Stu

          Comment


          • #6
            Husband left wife off of refinanced mortgage

            In article <[email protected]>,
            <[email protected]> wrote:
            A woman (state unknown) says when she and her husband recentlyrefinanced their mortgage, her husband "inadvertently" left her nameoff the papers, so the mortgage is in his name only.
            Must the names on the deed be the same as the names on the mortgage?
            Generally the bank will insist on that, because otherwise it can be
            too hard to foreclose. (Also, the more people it can go after should
            it foreclose and the sale not cover the mortgage, the better off it
            is.)
            Has he effectively removed her name from the deed by removing her fromthe mortgage?
            Nope.
            It's not really that easy, is it?
            No, it isn't.
            Wouldn't she have tosign something agreeing to remove herself from the deed?
            Something like that, yes. Two other people can't make a contract that
            removes her ownership.
            Or could this mean she is still a co-owner, but he is the only oneresponsible for the actual mortgage?
            Yes, sort of; depending on the form of ownership and the state
            (community property?)
            Is this something that could happen accidentally?
            Just about anything can happen accidentally.
            I assume the financial institution is not under any *obligation* topoint out that the names on the original mortgage are not on the newone, and confirm that this is indeed what the customer intended. Butis it customary that they would do so anyway?
            More likely, the bank would compare the names on the mortgage with the
            names on the deed, to protect itself.

            Seth

            Comment


            • #7
              Husband left wife off of refinanced mortgage

              In article <[email protected]>,
              <[email protected]> wrote:
              This is a situation that popped up on an internet forum, and it istherefore rather vague.A woman (state unknown) says when she and her husband recentlyrefinanced their mortgage, her husband "inadvertently" left her nameoff the papers, so the mortgage is in his name only. It's been so longsince I refinanced that I don't remember the particulars. Thus thequestions. :-)Must the names on the deed be the same as the names on the mortgage?
              no.
              `
              Has he effectively removed her name from the deed by removing her fromthe mortgage?
              No.
              It's not really that easy, is it?
              No.
              Wouldn't she have tosign something agreeing to remove herself from the deed? (Of course,I'm sure she signed whatever was placed in front of her, so it'spossible that she did, in fact, sign away her ownership if that's whathe intended.)Or could this mean she is still a co-owner, but he is the only oneresponsible for the actual mortgage?
              Eureka!
              Is this something that could happen accidentally? I assume thefinancial institution is not under any *obligation* to point out thatthe names on the original mortgage are not on the new one, and confirmthat this is indeed what the customer intended. But is it customarythat they would do so anyway?
              It is prima facie 'very improbable' that such a thing could/would happen
              in the first place.

              Lenders generally want _as_many_as_possible_ names on the 'dotted line'.
              The more names there are, the more probable that they can collect from
              _at_least_ one of them.

              In addition, should it be come necessary to foreclose on that mortgage,
              things get *really* messy. Depending on how title to the property is
              held, the mortgage issuer may ONLY have a claim to the 'undivided half
              interest' that the loan signer has in the property. Which would likely
              lead to a 'partition' action; except that that may be barred if the other
              party has 'homestead' rights.

              Mortgage issuers know "all about" these kinds of issues, and are d*mn
              sure not to let themselves get caught up in one. Avoiding such things
              is a basic part of 'due diligence' on their part.

              This is _why_ the situation, as postulated, is 'd*mn unlikely' to come
              about in the first place.


              Comment


              • #8
                Husband left wife off of refinanced mortgage


                <[email protected]> wrote in message
                news:[email protected]
                A woman (state unknown) says when she and her husband recently refinanced their mortgage, her husband "inadvertently" left her name off the papers, so the mortgage is in his name only.
                If it was refinanced with the original lender, it questions the competence
                of the lender.
                Must the names on the deed be the same as the names on the mortgage? Has he effectively removed her name from the deed by removing her from the mortgage?
                The mortgage is the obligation to pay money. The deed is the proof of
                ownership. They are different documents. One does not affect the other. The
                obligation to pay is not dependent on an ownership right, which is why
                quitclaiming an interest *does not* prevent the mortgage company from coming
                after the now non-owner down the road when the owner has stopped paying.
                Or could this mean she is still a co-owner, but he is the only one responsible for the actual mortgage?
                That would depend more on the intent of the parties, as well as if he could
                qualify for the mortgage alone based on his individual credit and income.

                Comment

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