My spouse and I have separated and are less than 2 months away from filing for divorce. We have a house and a townhouse, both occupied by renters. In our separation agreement he stated that he would buy me out of the townhouse, had it appraised and based on the equity would pay me $5k, and I would no longer own the townhouse. However, he did not do his research and based on the economy, is unable to refinance because there is not 20% equity. Is there any other way to remove my name from the mortgage? I know I can get off the deed, but I want to be off the mortgage in the event he chooses to default. Or can we refinance based on the situation??
You can’t refinance based on the situation, and the bank can not be forced to remove you from the mortgage. If you have a commercial loan there is a chance the bank may… but they have no reason to. In a separation agreement sometimes it may require the person refinance, or just accept responsibility for the debt, however they can’t force the bank to issue a new loan, and you maybe could later sue if he defaults, but if he is defaulting its probably b/c he doesn’t have money.
The house will have to be re-financed, or the bank will have to agree to release you from the mortgage.