Loaning money to adult child resulting from a divorce

[swabby01]

I'm fairly certain its not common to remove a borrower from a mortgage, but obviously is dependent on the banks policy. My gut tells me the loan needs to be refinanced with whomever retains the house, and the deed changed as well.

Clearly a call to the bank to see what they can do, if anything, is in order.

Most lending institutions have NO motivation to remove any signatory from a loan - no benefit to them only added risk. Not even sure the Judge could order that. I believe the judge can only order liquidation and division of asset

 

[ddk70]

Most lending institutions have NO motivation to remove any signatory from a loan - no benefit to them only added risk. Not even sure the Judge could order that. I believe the judge can only order liquidation and division of asset

Yes her name will stay on the mortgage-

There is a record for real estate purposes between the husband and spouse which she deed her interest to him. A deed of transfer of interest.

You are correct no motivation for banks to take her off. If he defaults after a 60 day period it is written in the special warranty deed she can sell the property asap. Atty refers to a "sale on court house steps" for anything above the mortage. Any profit above the mortgage she retain above the split of the property divorce settlement.

Update - she has left Texas, moved to FL mediation begins next week.

If he can afford to assume the mortgage and if agreed for him to assume which the bank does allow and was confirmed she moves on. There is "deed of record" which ex will have to sign which assumes all liabilites. She becomes free and clear. If not property gets sold everyone moves on.

Time to move forward now it becomes settling with the most positive outcome. Time is too precious to be wasting away bickering on issue via attorneys.

Haven't read through the replies, but just "gift" her the money free and clear. She wouldn't have to pay any interest on the loan. You'd have to file a form because it's over the 19k/person yearly gift, but no long term repercussions or tax unless you have the over 13 million estate when you die. On the private side, she can "gift" you an agreed amount every year to break even in whatever time frame you agree on.

 

[ddk70]

The $1,341 mortgage is the starting point for costs. Rent is the full cost except for a utility or two.

I'm on the "let the house go" team. Fresh start. Yard work, repairs, maintenance, property taxes, insurance, extra utilities. No thanks. No loan from parents to keep it.

Something seems amiss to just be talking about the house only. Is there a pre-nup? Why not get the full divorce settlement. There has to be more to the full divorc

What about late payments? Does her credit score get dinged?

Not that you asked my specific opinion, but I'd be less concerned about antagonizing the soon to be ex-husband and pushing for the cleanest of breaks.

Will put in negotiations confirmation of payment made to her on mortage. Possibly an electronic confirmation so not to surprise her after a 60 non payment notice, at which time she could sell the property