Legal Question in Real Estate Law in California

Re: removing my name from a loan

Your divorce decree supposedly allocates all the assets and debts your marital community had at the time, including the mortgage debt. If she got the house, very likely she is also assigned the mortgage as her sole obligation. However, as you know, the court can only re-allocate debts (and assets) between the divorcing spouses; it lacks jurisdiction over non-parties such as the note holder (lender).

Basically, there is no way to remove your name from a loan as a co-borrower without either (a) paying off the loan, or (b) obtaining the cooperation of the lender in re-writing the loan to remove you as a co-borrower/co-debtor. As to (b), why would the lender want to do that? Just to be a nice guy? They've got you on the hook; getting off the hook will take some negotiation and maybe payment of a fee. Most institutional lenders would have a policy on this.

As a practical matter, the willingness of a lender to re-write the loan may depend upon whether they would have recourse to the borrowers in the event of a default, or whether, as with purchase-money loans, their only recourse is to the house itself, and not the borrowers.

It may also depend on your ex-wife's credit rating.

I suppose if your ex-wife has not done the things she was ordered to do (i.e., refinance), you could apply for a court order to compel her to refinance. I guess you don't want to play hardball, however.

The part that I don't understand is why there would be any concern about losing the house. Are you helping with the payments? Why?

If I were you, I'd insist that she refinance. That's what the court ordered her to do. Either that, or she should deed you back an interest in the house - needn't be a half interest, but commensurate with the 1/2 of the debt load you now bear.