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Old 04-17-2008, 10:07 PM
 
Location: SW WY
16 posts, read 213,741 times
Reputation: 31
Default On title/deed, but not mortgage

I'm sorry if this has been asked before, but I searched like crazy and couldn't find anything. I also wasn't sure if this belongs here or in Mortgages, so sorry if I screwed up!!

We are currently house hunting. We are putting the mortgage in DH's name only. I am a SAHM so no income, plus I have a few credit dings (about $5K total) that have not been paid off...several medical bills and one credit card that was a $%*@ and wouldn't work with me when we were struggling 4 years ago, so I gave up on it. His credit history is limited but all positive. They ran it both ways and we are getting a much better deal without my name on it.

So to my question: If we put my name on the house but not the mortgage, can my past creditors come after the house as payment? I know obviously $5K is much less than a house will be worth, but can they put a lien on it or something to ensure they get paid? If it is going to cause issues we will just leave me off of it. I've been told to make sure I CMA and draw up legal documents that in case of death/divorce/whatever, the house is mine (well, split between DH and I in the case of divorce obviously! Though not counting on that happening.) But of course I'd rather just have my name on it and be done.

Does anyone know about this?

Thanks!

Nicole
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Old 04-18-2008, 05:33 AM
 
Location: Kauai
649 posts, read 2,309,148 times
Reputation: 432
It may vary from state to state, but in NY...

If your name is on the deed, the bank will require that it be on the mortgage. You do NOT have to be on the "Note" which is the promise to pay back the money borrowed to buy the house. The "mortgage" gives the bank (from which you take your loan to buy the house) the right to come after the house if the HOME LOAN is not paid. All owners of the property should be on the mortgage, and the bank will probably require that.

Now onto your individual creditors (the ones to whom you currently owe $5K, if I'm reading this right). Technically they can come after ANY property that YOU own, or in which you have an interest. That includes an interest in real property (e.g., if your name is on the deed to the house), with one exception: if you and DH are legally married, and you take title as "tenants by the entirety". Then your individual creditors CANNOT come after the house. IF you and DH have JOINT debts (where you are both named and both have a legal obligation to pay the money back), those creditors can come after the house. If you take it as tenants by the entirety, and DH dies, then the house is automatically yours - THEN your creditors CAN come after it. The same would be true if you were to get title after death or divorce, by any means.

If you take title NOT as "tenants by the entirety", but as "joint tenants with right of survivorship" or as "tenants in common", then your individual creditors can come after your 1/2 share of the house. At least that is how it works around here. Now, whether they are likely to do that, over $5K, I don't know.

You might want to consult an attorney who is versed in such matters.
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Old 04-18-2008, 05:43 AM
 
Location: Raleigh, NC
998 posts, read 3,399,420 times
Reputation: 600
I will tell you this.. I had a client that had issues with credit and collections. She put her name on the deed of her father's house (he was ill and she wanted the home to go to her instead of her siblings) anyway, they decided they wanted to move. Sold the house, but in the research of the title, the creditors attached a lien to the home and it had to be paid before it closed - these creditors were out of state. So I would be very careful... especially if you have creditors after you. Get legal counsel before you do this. In our state, if you are married.. you have to sign off on the deed.. but don't have to be on the mortgage.
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Old 04-18-2008, 06:04 AM
 
Location: Bay Area
2,406 posts, read 4,640,713 times
Reputation: 1760
We are in a similar situation. My husband is solely on the mortgage but we are both on the title. I do not think it will be problem, at least it is not for us, but maybe it is an issue that depends on the state.
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Old 04-18-2008, 07:05 AM
 
56,221 posts, read 28,057,614 times
Reputation: 7071
Quote:
Originally Posted by niknanette View Post
I'm sorry if this has been asked before, but I searched like crazy and couldn't find anything. I also wasn't sure if this belongs here or in Mortgages, so sorry if I screwed up!!

We are currently house hunting. We are putting the mortgage in DH's name only. I am a SAHM so no income, plus I have a few credit dings (about $5K total) that have not been paid off...several medical bills and one credit card that was a $%*@ and wouldn't work with me when we were struggling 4 years ago, so I gave up on it. His credit history is limited but all positive. They ran it both ways and we are getting a much better deal without my name on it.

So to my question: If we put my name on the house but not the mortgage, can my past creditors come after the house as payment? I know obviously $5K is much less than a house will be worth, but can they put a lien on it or something to ensure they get paid? If it is going to cause issues we will just leave me off of it. I've been told to make sure I CMA and draw up legal documents that in case of death/divorce/whatever, the house is mine (well, split between DH and I in the case of divorce obviously! Though not counting on that happening.) But of course I'd rather just have my name on it and be done.

Does anyone know about this?

Thanks!
Nicole
How old are the debts? If they are recent thats one thing, but if they are old, and passed the statue of limitations for being collectible thats something else.

If they are newer debts, put your name on the mortgage, not the deed. With your name not on the deed your creditors can not attach the property (from my understanding, others here might correct me). I have a similar situation. My name is on the mortgage, not the deed to our home, and depending on the bank and type of bills, they may or may not require these debts to be paid off. Medical bills tend to not need to be paid off, judgments banks ask to be paid off, but if the judgment is older, you can argue with the bank and some banks will waive this requirement.

My interest in the home is protected by a will, that in the event my fiance dies, I inherit the property. If one is married, the properties out of default go to the spouse if no will is created
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Old 04-18-2008, 08:21 AM
 
Location: A little suburb of Houston
3,700 posts, read 11,095,033 times
Reputation: 1886
DO NOT ever get on the mortgage without being on the deed to a house, very bad move. You could end up having to pay for something you do not even own (or take the credit hit lose/lose either way). Securing an interest by means of a will is useless since wills can be changed at any time and you are still left holding the bag. They can also be challenged. Being on a mortgage gives you absolutely no ownership interest in the property, without any other written contract you are just giving a gift of equity (or paying rent) to the person on the deed. Of course being on the deed w/o being on the mortgage means you get an ownership interest without technically having to pay for it (more or less).

In community property states, it may not matter weather you are or are not on the deed.

You really need to consult with an attorney.
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Old 04-18-2008, 09:58 AM
 
56,221 posts, read 28,057,614 times
Reputation: 7071
Quote:
Originally Posted by Poltracker View Post
DO NOT ever get on the mortgage without being on the deed to a house, very bad move. You could end up having to pay for something you do not even own (or take the credit hit lose/lose either way). Securing an interest by means of a will is useless since wills can be changed at any time and you are still left holding the bag. They can also be challenged. Being on a mortgage gives you absolutely no ownership interest in the property, without any other written contract you are just giving a gift of equity (or paying rent) to the person on the deed. Of course being on the deed w/o being on the mortgage means you get an ownership interest without technically having to pay for it (more or less).

In community property states, it may not matter weather you are or are not on the deed.

You really need to consult with an attorney.
That all depends on the reasons for why your name is on the mortgage and not the deed. I have absolutely no problem putting my name on a mortgage with my fiance's name on the property.

My reasoning is that I run several businesses.. When the businesses become profitable, they are turned over to the fiance, when they are operating in the red, they stay in my name. Since I have no other assets that are attachable, (remember, house not in my name).. I'm protecting our family from creditors.
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Old 04-18-2008, 10:45 AM
 
Location: Kauai
649 posts, read 2,309,148 times
Reputation: 432
Quote:
Originally Posted by pghquest View Post
If one is married, the properties out of default go to the spouse if no will is created
WIth respect to property that is owned by only one person (not jointly, as 'tenants by the entirety' or 'joint tenants with right of survivorship'), this is NOT true in every state (believe it or not). Please do not rely on this statement of how property will pass in the event of death - get an attorney in your state to advise you on this. In some states property will pass directly to the children (if there are any), and NOT to the spouse, even if the deceased was married at the time of death.
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Old 04-18-2008, 10:57 AM
 
Location: Kauai
649 posts, read 2,309,148 times
Reputation: 432
Oh, and everyone here seems to be using the term "mortgage" to refer to the mortgage LOAN. There are two documents, a "note" (promise to pay back X amount, on certain terms, such as monthly payments with interest), and a "mortgage", which is a security interest in real property. The MORTGAGE says, if I don't pay as required by the NOTE (or if whoever is supposed to pay, according to the note), the lender can take the property.

It really bugs me when the term "mortgage" is used to refer to the underlying LOAN obligation, as evidenced by the NOTE. I know most people do this... but still, it creates confusion.

A person can have title to real property (be "on the deed") without being obliged to pay the debt, that is, without being listed on the NOTE. But a lender should (and probably will) insist that everyone with an interest in the property (i.e., everyone "on the deed") sign the MORTGAGE - otherwise, it is much more difficult to take the whole property when the debt is not paid. They might only be able to take the interest (e.g., a 1/2 interest) of the person who signed the mortgage, not the entire property.
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Old 04-18-2008, 11:34 AM
 
Location: Great State of Texas
74,341 posts, read 34,468,271 times
Reputation: 17811
Every state has their own rules. Go speak to a real estate attorney about it. Don't rely on forum posters to know your situation and legalities of your state.
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