What Happens to Our House?

If the home is community property then it must be divided.  If the property is separate property it should be confirmed as separate property in the Decree of Divorce. How the property is legally characterized can be depend on a number of factors.  An experienced family law attorney can help you determine how the property is characterized.

If the home is community property and should be divided there are a number of possible ways to do so:

• The house can be sold and the equity can be split between the two spouses.
• The date the house is placed on the market can range from during the divorce to a date in the future that is agreed to by the parties and all the specific details for how it is listed, how offers are accepted, and how repairs are made should be specifically set forth in the Decree of Divorce.
• The house can be awarded to one of the spouses as that spouse’s share of the community property.
• One of the Spouses can buy out the equity portion of the other spouse.

It is important to recognize there are two separate issues with regard to home ownership.

• Legal Title – who appears or shall appear on the title
• The Mortgage – who is responsible for paying for the home

One of the most common mistakes made in a Decree of Divorce is to not address both of these issues.  There is nothing worse than having transferred ownership to your spouse and remain on the mortgage without any safeguards.  Transferring ownership does not relieve a spouse that is on the mortgage from the responsibility of paying the mortgage.

It’s always preferable to be removed from the mortgage if a refinance of the mortgage is possible.  This frees up credit for the spouse that is not awarded the house and provides for a clean break from the house.

During a refinance there are several things that should be considered if the grantor spouse would like to qualify for another mortgage soon.  There are many ways to accomplish a refinance and buyout of equity, but not all produce the same results when it comes to requalifying for a new mortgage.  An experienced family law attorney can make sure that you do what is in your best interest in the process.

Sometimes the parties are not able to refinance and that is when a Deed of Trust to Secure Assumption of the mortgage is necessary.  A Deed of Trust to Secure Assumption of an existing mortgage on real property gives the grantor spouse a lien on the property (subordinate to the mortgage company’s lien) in case the grantee spouse defaults on the mortgage.  If the grantee spouse defaults on the mortgage the deed of trust will require the mortgage company to notify the grantor spouse of its intent to foreclose.  This allows the grantor spouse the right to cure the default and take back the title to the property.

There are specific procedures that must be followed to make sure that you are protected when dividing real property.  An experienced family law attorney can protect you in the process. Contact our office today to get an evaluation of your case 214-265-7630.