Two Names on Note, One on Deed: Who is on the contract and the HUD?

Husband and wife on the mortgage note.  Husband only on the deed.  They divorced, she quitclaimed the house to him.  House is short.  SSA makes the sale contingent on bank approval.

BofA is stating that the Wife (who is not on the deed) must be shown as a seller on the purchase contract and be listed on the HUD.

This seems illogical to me.  And unnecessary to the attorney.  (Window dressing, but if it makes the bank more confortable, no harm in adding her name.)

Can others share actual experience on closed short sales under these circumstances?  What did the Servicer require regarding the name of the removed party?

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MIchael - I had a similar situtaion just recently.  It's a long story BUT, make sure both names are on the RPA and the HUD with a notation beside the ex-wife's name that she is a co-Borrower but NOT an "Owner".  Many times in divorce the property is deemed to be "given" in the divorce to one ex-spouse.  Never do they consider the actual mortgage note.  Then one party deeds the property to the other thinking they are done with it and can move on with their life.  Problem is they are EACH responsible for 100% of the debt and they don't think about that.  In fact, they don't think about the "Due on Sale" clause in their Note.   

So the short of it, is best to have both names on the RPA and maybe an Addendum that clarifies the selling parties Divorced and the property has been deeded to the ex-husband.  When you send it to BofA, include a copy of the Divorce Decree - that should show who was awarded the property.

 

Best of luck,


Thom Colby

Broker

Newport Beach CA

If I were the wife, I would want my name on the HUD and the Purchase & Sale Contract, that way, it would also be on the approval letter that would release from the financial liability as well. The quit claim deed does not magically absolve her from the mortgage liabilty.

In my experience, both Borrowers are responsible for the mortgage note.  A divorce nor quitclaim deed supersede the note.  You may choose to have a Power of Attorney signed by the wife to the husband, however, it will need to be approved by the Bank and the Title company.

 

Good luck,

 

 

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