Financial matters are one of the major reasons for the dissolution of a marriage today. Thus, it is not surprising that couples going through the divorce process often fall behind on their mortgages and face foreclosure. A couple of tips may help couples dealing with a marital home during divorce in Massachusetts.
In many divorce situations, one spouse will transfer his or her interest in the family residence to the other party. The spouse making the transfer thus thinks that the transfer relieves him or her of liability for the remaining mortgage. Unfortunately, the process does not work in this way.
If both parties have their names listed as borrowers on their mortgage, simply transferring the property from one spouse to the other will not get one of the spouse’s names removed from the mortgage. In the bank’s eyes, both parties have an obligation to ensure that their mortgage is paid. This is true no matter whose name is or is not on the actual deed.
If the couple in Massachusetts fails to pay the mortgage, both spouses will have foreclosure filed against them, which can affect their credit. In addition, they may face a deficiency judgment, where a court orders them to pay the deficiency between what the foreclosure property sold for and what was still owed for the house. Thus, taking the proper steps to clarify responsibility for the remaining mortgage during the divorce process is paramount. An attorney can help with ensuring that one’s financial rights and interests are upheld during a divorce proceeding involving the division of the marital home and other assets.
Source: themortgagereports.com, “Dealing with Divorce: How to Handle Your Mortgage When You Split“, Aug. 15, 2017