It’s not a fun process for anyone but unfortunately, divorce happens and when there’s a home involved, achieving property title and equity division demands expert analysis and process. Handing over the keys, payment responsibilities and even deeded rights does nothing to absolve one of their obligations to a lender.
If one party is relinquishing their ownership, they should also be released from any liability. Release from financing is a process that can only be achieved by modification, refinance, payoff or sale. In today’s world, break-ups do occur with high frequency and having access to the
necessary experience in helping your clients navigate the process as it relates to their mortgage loans is imperative.
One of the commonly misunderstood aspects of refinancing into a new mortgage is setting up the new escrow account and the costs involved in doing so. This is literally an aspect of mortgage financing where timing is everything.
The amount of funds required to establish a new escrow account is
dependent upon the timing of when current and future property taxes and homeowners insurance are due and payable. As you can imagine this can require a significant amount to be added to the new mortgage or require additional cash to close.
Additionally, in divorce situations, many clients are not aware of how future reimbursements of existing escrow accounts are handled when paying off or refinancing an existing jointly held mortgage. Any time a jointly held mortgage is paid off, whether through a sale or refinance of the marital home, the current lender will send a joint check made payable to both parties on the existing loan for any refunds on overpayment and escrow balances.
It is very important that we inform our divorcing clients of how overpayments will be handled to avoid any additional future conflict as to which party should receive the funds because both parties will need to endorse the check.
Are you or someone you know going through divorce? Reach out to us sooner than later! The Lindley Team are the only Portland Mortgage Lenders that are also Certified Divorce Lending Professionals. Contact us at: 503-517-8641 or firstname.lastname@example.org
The Lindley Team
Currently, The Lindley Team is the only Certified Divorce Lending Professional team in Portland, OR. Let us help equip you for the best possible outcome in relation to your mortgage and marital home.
Not a commitment to lock or lend. Terms and restrictions apply. Not all applicants will qualify. Mortgage Express, LLC. NMLS Company ID: 40831 | www.mtgxps.com | Licensed in OR/WA/CA. Licensing in CA by the Department of Business Oversight under the Residential Mortgage Act. Mortgage Express is an Equal Housing Lender. Questions and concerns may be directed to email@example.com, or 10260 SW Greenburg Road, Ste. 830, Portland, OR 97223.