Legal Question in Family Law in Maryland

Re: Is refinance necessary to remove spouse from deed?

Refinancing may be necessary where the mortgage company does not agree to release one spouse. If you execute a deed to release the spouse then the escalation clause in the mortgage may take effect. Mortgage companies are reluctant to execute a release where they do not have a reasonable basis for assuring future payments.

I am questioning why such a release is being pursued as it may not be in the interest of the spouse who is releasing ownership. It is possible that the agreement between the spouses is not adequate for the one that is receiving ownership.

I have dealt with clients who have encountered difficulty with obtaining a release and have been able to negotiate with a mortgate company. Alternatively I also have associates who are able to provide financing where qualifying may be problematic.

Contact an attorney should you require assistance.

Re: Is refinance necessary to remove spouse from deed?

It is definitely necessary to refinance to remove one party from the mortgage, and the lender will want to review the financial status of the party who will own the property. Lenders are always happier to have two people liable for the debt. The party giving up an interest in the property will certainly want to have his or her name removed from the mortgage and will most likely not transfer interest without also transferring liability..