All Forum Posts by: Peter Walther

It happens in divorces all the time.  In happier times the husband and wife buy a house and give a mortgage to pay for the purchase.  They get a divorce, and one spouse is awarded the house and is ordered to make the mortgage payments and hold the other spouse harmless from the obligation.  That's fine as between them but the lender is still going to hold both liable for the debt if the payments aren't made.  The non-title holding ex-spouse can ask the lender to release them from the Note, but it's rarely given in my experience.

 But you wrote "If the man wanted to he could sell the house and keep the profit", nothing about your advice is based on having reviewed the divorce.  If you read my reply to Chris Seveney, I think you'll see that I suggested the possibility of the wife's interest being memorialized.  I think you'll also find that even if he isn't liable for the debt, his interest in the property is subject to the lien of the mortgage.  If he sells the house the mortgage should be paid off out of the purchase price.  He might get to keep the net proceeds but the debt gets paid, and the mortgage is satisfied.  While I'm not an accountant, CPA or attorney, I'm hard pressed to believe that if the mortgage is paid in full from the sales price the wife has to worry about getting a 1099.

 Are you willing to insure the OP if she buys the house?

I think it's possible the final decree of divorce or the property settlement agreement required her to give him a deed in return for him paying her equity.  If he failed to pay, it could be construed to be a failure of consideration so the deed fails and she's still in title with him and all he can convey is his half.  All this is speculation though.

I suggest you write up a contract with your seller and take it and your GFD to a local title agent.  They'll produce a title commitment with the requirements they think are necessary to get you insurable title.

I believe in Florida, HOA liens have priority as of the recording of the declaration of the restrictions except for first mortgages where the lien has priority as of the recording of the lien. (Fla. Stat. 720.385) So if the junior lien holders were properly served, their interest should be extinguished. However, as Jay suggested, ask a title agent for a commitment to issue you a policy and see what they would take exception for.

 You're welcome.

Assuming your corp received a title policy when it acquired the property, you could go back to the attorney or title agent that handled that closing and ask them 1. can they prepare the deed; 2. can they issue an endorsement to the policy changing the name of the insured to you as the Grantee.

This is the trouble HELOC lenders got into by not getting a traditional title policy.

BofA Sues First American Over Title Insurance Claims - MortgageOrb

I suggest you start by reading the insurance policy, starting with the definition section which should tell you who is insured.  I'd also carefully read the section on how the loss payment is made.