Legal Question in Real Estate Law in New York

Re: Title & Mortgage Transfer after Break-Up

You will require a mortage Refinancing or Recasting, and a "new" Deed transferring title from the two you, to you alone.

You will need to prove to the lender, mortgagee, that you can carry the costs of the home and mortgage, with your income alone. If necessary, the lender may permit you to have a Guarantor on the mortgage, that is not a title holder.

You should not attempt to make any changes, without an attorney.

Good luck,

Phroska L. McAlister,ESQ

Re: Title & Mortgage Transfer after Break-Up

You would need a deed from your partner to yourself conveying all of the partner's interest in the house. You would need a modification of mortgage from the mortgagee discharging your partner's responsibility on the note. That's the challenging part, since the bank underwrote the loan on the basis of both of you as borrowers. It will be especially difficult if the mortgage has been securitized, as so often happens these days (as in, if the mortgage has been securitized, it will be just about impossible; but you can ask anyway.)

If the deed is recorded without getting the bank's permission, it might trigger a default clause in your mortgage. And even if it's not a default, it could get the bank upset with you, so it's not something you should do without talking to your bank first.

This post is not legal advice and does not create an attorney-client relationship. It is a comment on the legal question posed by the poster and should not be relied upon unless and until an attorney-client relationship is entered into. Doing so would require signing an engagement letter and depositing a retainer to secure payment of legal fees.

You might well have to refinance the house with you as the sole mortgagor and obligor on the note.

Re: Title & Mortgage Transfer after Break-Up

I concur with Kevin, and a review of the mortgage documents is necessary to ascertain what happens if the change of ownership takes place. The bank may not let the cohabitant off the mortgage, so even if title is transferred there is an exposure if you fail to make the mortgage payments. This may require that you give your cohabitant a save harmless agreement, which may not be accepted depending upon your credit. The bank should be consulted to see if they will call the current mortgage if the transfer takes place and/or let the cohabitant off the hook. This change of ownership might also allow or let the bank change in interest rates. If the bank gives you any problems that the 2 of you cannot work out, two alternative suggestions, depending upon your exposure and credit rating: (1) Arrange to refinance the current mortgage, which might even get you a lower rate, depending on when the property was origignally mortgaged and your credit rating, or (2) enter into a contract sale with your cohabitant. This essentially is a written agreement that is supported by the new Deed taking the cohabitant off title. However, the Deed is not recorded, but is held in escrow to be recorded when the current mortgage is paid. The written agreement, which spells out the terms of what is required before the Deed can be recorded is the document recorded. It says that you are the owner, responsible for everyting (mortgage, taxes, insurance, etc,) and that when the mortgage is paid, the Deed can be recorded. If you default, the Deed is destroyed and your cohabitant remains as a co-owner. While this is not a traditional way of doing things, it is legal and is used frequently when title is to be transferred but certain obligations must be satisfied before the Deed can be recorded. If you need assistance on the contract sale, contact me as I do it on occasions when it is needed.