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Loan modification and ex wife sign
I am doing a loan modification and the lender says that my ex wife has to sign the documents too. Even though her name has never been on the mortgage, she is only on the deed. Why does she have to sign the loan modification?
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1 Reply
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In a loan modification process, if your ex-wife’s name is on the title deed, she may be compelled to sign the amendment papers by the lender, although her name does not appear on the mortgage. Here’s why:
Ownership Interest: When someone else is listed as an owner of the record for real estate property with you, in this case, your wife from whom you are divorced, legally speaking, they have an ownership interest too. Therefore, any changes made regarding such things must involve all parties holding some form or stake of interest like mortgages, loans, and other joint credit tradelines. In the event of default or failure on any credit tradelines that were held jointly while married, it could mean endangering its rights over that particular piece of land, which might lead to future lawsuits or claims.
Legal consents:
Getting her signature on these documents through consent proves there was an agreement between them regarding this factor. Thus preventing any possible challenges from arising later on if she ever disputes modifications done during the loan restructuring exercise.
Lien & Title Considerations: Lenders’ lien attaches itself to properties, i.e., houses, rather than people who have signed those agreements. Hence, the need arises for recognition by signing a new contract where applicable, even though not responsible for debt repayment, so as not to affect rights associated with such co-ownership arrangement. Since, at law, when one person holds title deeds jointly with another party, each partner has equal share rights over the entire premises covered under the said instrument. Therefore, their interest should also be protected within the framework of amended terms by putting down her signature.
State law requirements: Depending on specific states’ legislation, sometimes, even if somebody does not borrow money but owns part or the whole house alongside you as joint tenants in common, they must also sign off official paperwork related to home loans according to local laws applicable there during the registration process. Thus, all involved know what is happening around them involving shared resources. If your ex-spouse or former wife refuses to sign these documents, you can still proceed with the loan modification process. However, you may need to seek legal advice from a real estate attorney or consult the divorce decree to determine if any provisions could affect her interest in the property.
Generally, all loan modification lenders need this formality. It is better to assume the worst-case scenario. It is better to be safe so it will not be held liable later concerning cases arising from such transactions entered into. Hopefully, it will be better than assumed. Still, all parties should be safe and think about it without considering other partners’ rights who have joint ownership with their clients over certain pieces of land but are not parties involved directly within specific mortgage contracts. Hence, it is a customary practice followed by banks when dealing with alterations made on mortgages where multiple individuals hold various rights as co-owners even though only one person signs the mortgagee’s agreement, whereas another does not append their signature.