One issue that is often the most concerning to people going through a divorce is the family home. After all, not only is it the place where more memories and important events occurred than any other for your family, but it is most likely the most significant financial investment and asset that you can claim.
When you combine matters of the heart and values of the wallet, you can see why this subject leads many people to worry that it is being handled correctly in the context of a long and difficult divorce case.
If the family home was purchased during your marriage, it is likely community property. Community property has no one owner- you and your spouse jointly own it. The specific proportion of ownership and its impact on your divorce is unique to your situation, but the point is that it will be up to you and your spouse to divide ownership of the home in your divorce or have the judge do so.Your divorce will likely settle before entering into a trial. This means that you and your spouse will be in control of the terms of your marital split. When it comes to your house, there are only three ways to resolve its ownership: either you
- will remain in the home, and your spouse will leave (or vice versa) or
- the house will be sold, and the equity will be split between the two of you in some manner.
For the sake of today's blog post, let's limit the possibilities to the former of those two- with one spouse remaining in the home and the other leaving to live elsewhere.
What to do about the Mortgage
Unless you and your spouse can count yourself among the very few who own your home outright, you will likely have a mortgage on your home that you make payments on.
That Mortgage is held by a financial institution of some sort- your credit union, bank, mortgage company, or other entity. Supposing that you and your spouse agreed to have you remain in the home and move, specific steps can be taken to ensure a smooth and relatively pain-free transition is accomplished.
A mortgage secures the debt owed to the lending company against your home. Even though your divorce decree may free your ex-spouse of liability from making payments on the Mortgage moving forward, this will not suffice for purposes of releasing them from responsibility in the eyes of the mortgage company.
After all, you both agreed to have your names listed on borrowers and are liable for the debt as a result. Even if your spouse has conveyed their ownership interest in the home to you in a Special Warranty Deed, this still does not clear him or her of their responsibility to pay the Mortgage.
Suppose then that you fall behind on your mortgage payments. What recourse does your ex-spouse have against you to protect their interests? With their having ceded all property rights in the home to you, it would seem that they are in a no-win position.
Suppose the bank would foreclose on your home and sell it. In that case, there is a possibility that it could sue both you and your ex-spouse to make up for any deficiency as far as the difference between what the home sold for and the amount of money lent to you initially to purchase the home.
A Deed of Trust to Secure Assumption as a means to tie up the loose ends of your home loan
What will likely happen in your divorce is that your spouse's attorney will request that a Deed of Trust to Secure Assumption is executed upon the conclusion of your divorce. This document will protect your ex-spouse from a default on the home loan that occurs if you fail to make timely payments in the future.
You can think of a Deed of Trust to Secure Assumption like a second mortgage on the home- it allows your ex-spouse to re-enter the picture and take back the house if you do not pay the Mortgage in a timely fashion month. You are assuming the obligation to pay the Mortgage, and the deed of trust secures that responsibility for you.
Your spouse will want to contact the mortgage company as soon as possible after the divorce to notify them of their right as granted by the Deed of Trust to Secure Assumption. The reason being is that they will need to sue for foreclosure before the mortgage company or risk having their lien wiped out by the mortgage company's foreclosure process.
Although the Deed of Trust to Secure Assumption is a method to protect your spouse's rights, it is not without its drawbacks. For instance, if you do fall behind on your Mortgage, then your spouse will need to go through the foreclosure process him or herself, make all past payments to get the loan current, and then attempt to sell the property to get all the money back that they spent during the process. If this doesn't sound ideal to you, I can't say that I disagree.
However, in exchange for your getting the house of the divorce, it is the protection offered to your spouse. The same is true if you are the spouse who no longer resides in the home.
Questions on Deeds of Trust to Secure Assumption? Contact the Law Office of Bryan Fagan, PLLC
We just described the process probably seems more akin to what a real estate attorney would discuss than a family law attorney. With that said, divorce cases tend to blend multiple areas of a family's life, and real estate is one area. As a result, having an attorney who can advocate for your rights and protect your interests is crucial.
The attorneys with the Law Office of Bryan Fagan, PLLC, represent clients across southeast Texas and would be honored to speak to you and your family about doing the same for you. A free-of-charge consultation with one of our licensed family law attorneys is only a phone call away.
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Other Articles you may be interested in:
- How a mortgage is handled in a Texas Divorce
- How Do I Get my name or my soon-to-be Ex-Spouse's Name off the Mortgage in a Texas Divorce?
- Getting the Deed to Your House After a Texas Divorce
- Does it Matter Whose Name is on Title or Deed of Property in a Divorce in Texas?
- How Much Will My Texas Divorce Cost?
- Dividing Property in a Texas Divorce - The Just and Right Division
- Why is Separate Property Important and How to Keep it Separate in a Texas Divorce?
- What Wikipedia Can't Tell you About Texas Divorce and Marital Property Division
- Texas Divorce Property Division Enforcement
- Separate Property in a Texas Divorce?
Law Office of Bryan Fagan, PLLC | Spring Divorce Lawyer
The Law Office of Bryan Fagan, PLLC, routinely handles matters that affect children and families. If you have questions regarding divorce, it's essential to speak with a Spring, TX Divorce Lawyer right away to protect your rights.
A divorce lawyer in Spring, TX, is skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact the Law Office of Bryan Fagan, PLLC by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan, PLLC, handles Divorce cases in Spring, Texas, Cypress, Spring, Klein, Humble, Kingwood, Tomball, The Woodlands, Houston, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County, and Waller County.