Legal Question in Consumer Law in Virginia

Re: Removing a name from a Mortgage

Whether to refinance these mortgages or to pay them off are really questions as to what would likely be more advantageous for you from a taxation perspective (which you will need to figure out) rather than having anything much to do with removing your sister's name from an ownership claim to these properties.

In order to accomplish that you will also have to remove her name from the deeds and titles to these properties which may also involve paying her

some money for her respective ownership interests in each one.

Re: Removing a name from a Mortgage

To protect the property from any claims against it relating to your sister, you would want to remove her name from the DEED as an owner. Or put more precisely, the three of you (husband, sister, & yourself) would execute a NEW deed conveying the property to only the 2 of you (husband and yourself). This would require your sister to sign the deed.

However, the mortgage lender is not going to want you to do this while the mortgage is still pending. Technically, taking your sister's name off the mortgage does not help you or affect you in any way (in terms of what you are trying to accomplish). However, the mortgage lender has a right to the property as security for their mortgage. So they are not going to agree to a new deed unless they are protected. Executing a new deed could possibly be taken as superseding (overriding) their lien on the property. (It wouldn't, really, but as a matter of custom people worry about such things.)

I don't believe there is any way to remove your sister from an owner on the property if she is a true owner (listed as a grantee in the deeds) other than her being willing to sign. Naturally, her failure to contribute to the mortgage paymetns would be a reason for asking her to do that. (A neat, "clean" reason avoiding a show-down over her relationships which would probably degenerate in an unproductive fight. But fact is she is not paying on the mortgages or contributing, as you describe it.)

Two things you might do other than paying off the mortgages: (1) Get the mortgage lender's approval for the change, or (2) Enter into a sales contract with your sister selling the property from the 3 of you to the 2 of you (husband and yourself), and have her sign a deed. Then DON'T record the deed until you can get around to paying off the mortgage. As long as the mortgage lender gets paid off, that should be okay: NOTE/WARNING: If you failed to pay the mortgage off, and did record the deed, this might be considered fraudulent against the mortgage lender's security. However, I believe the mortgage "lien" would in fact be unaffected. I don't believe the new deed would be capable of harming the mortgage lender's security.