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Question and Scenario - I reside in Arizona - I am married

Resolved Question:

Question and Scenario -

I reside in Arizona - I am married - my wife has excellent credit; mine, not so good. She is purchasing the house we live in; her name and her name only will be on the mortgage. The lender requires me to sign a document stating I have no financial interest in the property.

Questions -

1) Does this preclude me from adding my name to the title after the deal closes? If my name is XXXXX XXXXX title can the lender just arbitrarily call the loan? Have you seen or heard of these types of scenarios?

2) If I decide to leave my name off title - this would mean I am married living in a house where I am not on the mortgage and am not on the title -- what happens if she decides to divorce me? Because my name is XXXXX XXXXX the title or the mortgage, do I automatically forgo all rights (including financial gain) from the property itself?? I honestly don't care about the house; if she decides to walk, she can have it I will survive....but assuming that she has 100's of thousands of dollars in the mortgage, until it is paid off, my name is XXXXX XXXXX the title nor is it on the mortgage - so if It came down to divorce how would this play out for me financially? - again, I reside in Arizona.

Thank You
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Pro replied 1 year ago.
Welcome to JustAnswer! My goal is to do my very best to understand your situation and to provide a full and complete excellent answer for you.

My name is XXXXX XXXXX I'm going to assist you with your question.

Please bear with me if you believe my answer isn’t coming fast enough because I’m also working with other customers too. I apologize for any seemingly late response.

I am going to post your statements and then respond to them.

I reside in Arizona - I am married - my wife has excellent credit; mine, not so good. She is purchasing the house we live in; her name and her name only will be on the

mortgage. The lender requires me to sign a document stating I have no financial interest in the property.

Questions -

1) Does this preclude me from adding my name to the title after the deal closes? If my name is XXXXX XXXXX title can the lender just arbitrarily call the loan? Have you seen or heard of these types of scenarios?

 

YES. ALL MORTGAGES HAVE AN ACCELLERATION CLAUSE THAT THEY CAN USE TO ACCELLERATE AND DEMAND THE MORTGAGE OR LOAN BE PAID OFF IMMEDIATELY IF THEIR INTEREST IN THE PROPERTY IS IN ANY WAY INFRINGED UPON.


Acceleration clauses are terms in loan agreements that require the borrower to pay off the loan immediately if certain conditions are met. For example, most home mortgages have an acceleration clause that is triggered if the borrower misses too many payments. Acceleration clauses most often appear in mortgages, both residential and commercial. They also appear in some leases.

When a lender invokes an acceleration clause, the borrower must immediately pay the unpaid balance of the loan’s principal, as well as any interest that accumulated before the lender invoked the acceleration clause. The borrower does not, however, have to pay the full amount of interest that would have come due had the loan been paid off normally. For example, most loans allow the borrower to accelerate the loan and pay off the loan early in a single lump sum to avoid paying interest for the remainder of the loan’s term.

 

THAT THE LENDER PROBABLY WON'T KNOW IF YOU DID ADD YOUR NAME TO THE DEED OR TITLE TO THE PROPERTY BECAUSE THEY DON'T HAVE SOMEONE WAITING AND SEARCHING THE RECORDER'S RECORDS. BUT, IF THERE WAS A PROBLEM OR MISSED PAYMENT LATER ON AND THEY DID SEARCH THE TITLE - JUST ON THAT BASIS THEY COULD ACCELLERATE THE LOAN.

 

 

2) If I decide to leave my name off title - this would mean I am married living in a house where I am not on the mortgage and am not on the title -- what happens if she decides to divorce me? Because my name is not on the title or the mortgage, do I automatically forgo all rights (including financial gain) from the property itself?? I honestly don't care about the house; if she decides to walk, she can have it I will survive....but assuming that she has 100's of thousands of dollars in the mortgage, until it is paid off, my name is XXXXX XXXXX the title nor is it on the mortgage - so if It came down to divorce how would this play out for me financially? - again, I reside in Arizona.

 

 

THAT'S IS STRICTLY WITH THE LENDER - NOTHING TO DO WITH FORGOING YOUR MARITAL INTEREST IN THE PROPERTY. YOU WOULD STILL HAVE YOUR MARITAL INTEREST REGARDLESS THAT YOU SIGN THAT DOCUMENT FROM THE LENDER.

 

MOREOVER, THAT IT'S PRESUMED THAT YOU DO HAVE A MARITAL INTEREST IN THE PROPERTY BECAUSE YOU WERE MARRIED DURING OWNERSHIP AND THAT YOU WERE MARRIED AFTER CLOSING ON THE PROPERTY.

 

THAT A SPOUSE HAS A MARITAL CLAIM UPON ANY INCOME EARNED DURING THE MARRIAGE - AND SHE WOULD BE USING MARITAL INCOME TO MAKE THE MORTGAGE PAYMENTS.

 

I WOULD NOT WORRY AT ALL ABOUT THAT DOCUMENT THEY WANT TO EXECUTE WHATSOEVER - YOU WILL BE GIVING UP NO MARITAL RIGHTS BY SIGNING THAT.

 

 

 

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!

Customer: replied 1 year ago.

Thank you for the comprehensive response to my question -Why should I even bother to put my name on the title given the fact this lender has this acceleration clause AND given the fact I am entitled to half the money(income earned" during the marriage anyway? What would be advantage to being on the title as long as this mortgage is on the house?? As you said, i don't give up my marital rights in this regard - so am I just being over the top about wanting my name on the title????

THANK YOU!

Expert:  Law Pro replied 1 year ago.
What would be advantage to being on the title as long as this mortgage is on the house??

None. Even if your name was on title - the property would stillb subject to the mortgage loan/lien and they could foreclose on the property even though you were a joint owner of the property.

As you said, i don't give up my marital rights in this regard - so am I just being over the top about wanting my name on the title????

Just cautious in my opinion and wanting to know what the law is. They are requesting this for purposes of underwriting the loan (getting the loan approved) - that if one spouse doesn't have great credit - even listing them with their spouse who does have great credit reduces their credit score and makes it harder for them to get a loan.


I wouldn't worry about all about that document.


Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!
Law Pro, Lawyer
Category: Real Estate Law
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Experience: 20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
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