Legal Question in Criminal Law in Wisconsin

Is lying during a home refinance considered a criminal tort (fraud)?

My Fianc�' went through a divorce in March. Under the terms of the Divorce contract her ex-husband was stipulated that the home required refinancing to get my fianc� off the home and the mortgage. The ex-husband told her that he was refinancing the home and that she had to pay $2000.00 for the closing costs (quick claim deed). That was in May. Now in September my fianc� and I found that he lied to her. He never refinanced to get her name off the initial loan. He instead took out a 2nd mortgage and kept the first loan with her name on it. All he did was get her name off the house with the quick claim deed. Since he lied about the refinance and she was under false pretences during the signing, does this void the contracts she signed? Is this fraud? If so, what can she do legally to rectify the situation? Her credit is still at risk being on the loan she thought she was off. Also, since he knowingly did this what punitive damages may he face in this situation?

Thanks for your time!

--name removed--


Asked on 9/12/06, 3:47 pm

1 Answer from Attorneys
JAY Nixon nixon law offices

Fraud by Former Spouse in Refinancing Home

This situation illustrates why nobody who is not an expert in secured transactions should ever engage in a real estate transaction without the assistance of a lawyer. This includes refinancing, since no real estate attorney representing your friend would ever have allowed such a transaction to go forward. It sounds like fraud by the former spouse if all these claims can be proven, but it is still nearly impossible to undo the new second mortgage unless the bank was also somehow a participant in the fraud. Verbal representations rarely carry any weight in a real estate transaction, so your friend might not even be able to prove fraud against the former spouse. Suing the former spouse for recovery of your friend's share of the proceeds (or prosecuting him criminally) could result in a restitution order, but it may not ever get the money returned to the duped spouse if the funds have already vanished and the former spouse is now broke.

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Answered on 9/12/06, 7:35 pm


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