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Is "Dad" still alive? Did the divorce decree attempt to make a conveyance of title or just direct one party to deed the property to "Mom"? Have you looked into recording the divorce decree as a muniment of title?
Dad is still alive. Not sure what a muniment of title is.
If he is still alive, then the title issues can be resolved by obtaining a deed from him pursuant to the divorce decree. If he refuses, he can be forced to sign over the property or face a petition for indirect contempt of court (failure to follow the directive in the divorce decree).
Further, in TX, certified copies of divorce decrees can sometimes be filed to serve as a deed.
The loan would be fine regardless of the purported title issues because the divorce decree extinguishes any legal right that "Dad" has to the property. Thus, it doesn't matter that he did not sign any of the loan documents.
Unfortunately, if her step-father signed the loan document, he is still liable for the loan regardless of whether he has any interest in the property.
Once the title issues are resolved by getting the deed or recording the decree as a muniment of title, then the mother's will can probably also be filed as a muniment of title so that title is solely in the names of the beneficiaries named in the will. They can then proceed to close on the sale of the property and transfer good title.
There are several steps to the process and given the money at stake in selling the home it would certainly be worth spending a few thousand dollars to retain a local TX attorney to assist you with getting everything in order. www.martindale.com and the TX bar association's website are both good starting places to locate a TX real estate attorney.
Okay. Since Dad has no legal right to the property, can a judgement issued against him personally in 2008 impair our ability to transfer good title to the buyer? The title company seems to think that a release is required before they can issue a title policy. Maybe the steps you discussed above might correct that problem. Also, if Step Dad is still liable for the loan, would the entire loan balance be required to be paid from the sale proceeds?
Yes, taking the steps above should resolve the issues. Yes, there is still a valid lien against the property for the loan so the loan will need to be paid in full in order to transfer good title.
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