Legal Question in Real Estate Law in California

First, you should review the court-approved or court-ordered property settlement that was part of your divorce decree. That should address the house issue, both as to which of you will be or shall remain owners, and which of you is responsible for the debt on the house. Could be you, him or both, and if it were awarded to him, you should complete the transfer with the knowledge and cooperation of the lender, most of which will accommodate divorce property settlements.

If the settlement gives you a half interest, but there is little or no value to the half interest because the loan approaches or exceeds the market value, you have the option of giving your interest to your ex.

Whether you have moderate, little or no financial or credit-rating exposure to the lender depends upon several factors. First, bear in mind that California has a fairly comprehensive set of so-called "antideficiency" laws that protect residential borrowers from lender claims for shortfall after foreclosure, or from direct suits for unpaid loans. One of these is a collateral-first rule that requires the lender to pursue the collateral by trustee sale or court foreclosure before seeking cash from the borrowers. Others require the lender to be satisfied with the sale proceeds in full satisfaction of the debt - these apply if the foreclosure is by trustee's sale OR the loan was purchase money. Therefore, there is little or no possibility of a claim against a borrower or co-borrower in 99.5% of situations.

The exceptions are second mortgages after the first mortgage has been foreclosed; certain loans for non-owner-occupied (income) properties; and situations where the lender has a complaint against the borrower for something other than repayment -- such as loan-application fraud, waste of the collateral, and the like.

You should consider consulting a tax advisor regarding the capital-gains and losses treatment of giving your interest in the house to your ex.

Mr. Whipple gives good general advice, but it appears he does not do much family law. You should talk to a family law attorney about why this wasn't dealt with in your divorce and what you can do in divorce court to deal with it. In general, however, a person should not relinquish title until it is part of a refinance that gets you off the debt too. Of course there are exceptions, which is why you should go over the details with a family law attorney.

This should have been dealt with in the divorce proceedings.

Doing a quit claim now would take you off title, but you still signed loan documents, such as a promissory note, and would be personally liable on the underlying loan. The property would remain subject to the recorded deed of trust. So doing a quit claim alone would not get you anywhere.

Your ex is going to have to get the lender's permission, usually by refinancing, to take you off the loan paperwork. That may be difficult given the current economic situation.