Legal Question in Family Law in Texas
In our divorce and separation of real estate assets, my wife is getting the home will refinance it
in her name. We were provided a warranty deed (which I’ve signed), and a “deed of trust to secure
assumption” for her to sign. She will not sign this document for several reason and concerns which I hope to
clarify through an impartial third party. I need each question/issue answered in plain terms please.
1) She thinks the deed of trust to secure assumption places an actual “lien” on the home. A second lien
which if you looked the property you’d see two liens on it. My lawyer’s office told me it’s
not an actual “lien”, only a lien on paper. Does it place a public “lien” on the property, or is it
just filed away? ( See#2)
2) My lawyers office said the deed of trust to secure assumption just gets filed with the county
clerk. No one (like a lender) would actually “see” the document unless it was needed, or I needed
to use it. Is this correct?
3) She was told that a deed of trust to secure assumption is highly usual to use and very rare.
My lawyer says it’s extremely common and mandatory especially if a warranty deed has been signed.
Which is it?
4) She doesn’t see the need for a deed of trust to secure assumption and thinks if she defaults on the loan,
or passes away before she can refinance, its winner take all (I get everything) While that may be technically
accurate, is there an easier way to understand what the document is actually doing?
1 Answer from Attorneys
(1) It does not create a lien. Here's what it does. It says that if she does not pay the mortgage as per the mortgage contract, you can make the payment for her. If you make the payment for her, she has to pay you back. If she does not pay you back, you can foreclose on the house to collect your money. If you foreclose on the house, first taxes get paid, then the mortgage company, then you, and your ex gets the rest.
(2) I have never filed one with the county clerk. But if it is filed with the county clerk, people will be able to see it.
(3) I always require a deed of trust to secure assumption in all cases where my client's name is on the loan but the other party is being awarded the home. 100% of all cases.
(4) You need the DOTSA in case she fails to pay the mortgage that is in your name for ANY reason: dies, becomes disabled, loses her job, decides she's tired of it and wants to get back at you by destroying your credit, etc. If she dies and you didn't get a DOTSA, you are going to have a hard time. You will NOT get the house back--it will go your kids or her new spouse or anyone she leaves it to in a Will. They will take the house subject to the loan, but nothing would force them to pay the loan and THEY could ruin your credit.
You have to do the DOTSA. Your attorney knows what he or she is talking about. Your wife is wrong on every single point. Listen to your attorney. Do not deliver a warranty deed without getting a DOTSA in return.
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