Loan Modification without my knowledge, quit claim deed issues, divorced, need some help!

Danielle

LoanSafe Member
#1
I have seen a few older threads on here about this subject so I apologize if this information has already been stated but I really need some help with this issue. Long story short:

My ex and I divorced in May of 2010. I signed a quit claim deed. He eventually got VERY behind on the payments, didn't tell me much about it. He later informed me that he had done (2) loan modifications in an effort to keep the house. For each of these I was never contacted. He would not give me any of the paperwork for it. Finally, I got frustrated and called the mortgage company (Wells Fargo) only to find out that he was 9 payments behind and owed over $12,000. I explained that I had not been notified of this and questioned why they would be going into foreclosure without ever even calling me. I was told that because I signed a quit claim deed that they did not need to notify me of anything. I went round and round with the woman on the phone about how that could even make any sense when they are reporting on my credit and trashing it and not ever otherwise notifying me of my supposed "outstanding debt." I feel that my rights have been violated by not ever being notified and by the mortgage company doing a loan modification without my knowledge, or going into foreclosure without my knowledge. It is my understanding that a quit claim deed simply releases you of the interest in the house, but it would not release you of an interest in the mortgage. The two are separate.

How are they getting away with using the quit claim deed in this manner? What recourse do I have? Please help! The house will be going through a short sale process next week and very soon after a foreclosure. I have contacted several attorneys and am hoping that someone can help me. Does anyone have any further advice?
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
#2
It is my understanding that a quit claim deed simply releases you of the interest in the house, but it would not release you of an interest in the mortgage. The two are separate.

How are they getting away with using the quit claim deed in this manner? What recourse do I have? Please help! The house will be going through a short sale process next week and very soon after a foreclosure. I have contacted several attorneys and am hoping that someone can help me. Does anyone have any further advice?
Welcome to the forum Danielle.

You are completely correct that the quit claim deed does not release your responsibility to the mortgage and you will still be listed as a co-borrower on the loan. Since you are no longer living in the property (unless you disclosed your new address with the lender) they could not send you anything in regards to the foreclosure, foreclosure notices will be sent to your ex husband. I'm very surprised and do not know how he could have completed a loan modification without your signature. Since you are still technically on the loan the permanent modification would of needed to be signed by you as well to complete the agreement.. I'm thinking there's a possibility your ex may have forged your signature ot complete the mod..
 

Danielle

LoanSafe Member
#3
Thanks for your response. Yes, I had considered that as a possibility. I am going to try to get some copies of the paperwork before I go too much further. I would like to see if I have a leg to stand on so to speak. My credit has dropped over 100 points due to this whole issue and I want to just be off the mortgage and done with this issue if at all possible. Is there any way other than paying an attorney a large amount of money to pursue this? I do feel that the loan modifications were potentially illegal and a violation of my rights as a co-borrower on the loan.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
#4
The loan modifications are really not going to have any negative effect and will actually benefit your situation as they help avoid foreclosure. Unfortunately, the only way you can be removed from the mortgage is through an assumption or your ex refinancing the home into his name only, which will not be possible due to the missed payments on the account..
 

Danielle

LoanSafe Member
#5
But the goal is to be removed from the mortgage and if they basically modified the loan without my consent, wouldn't I be refinanced off? Anther concern at this point is of course to get the negative points on my credit removed if at all possible. Wouldn't that possibly be an argument? It seems to me that they can't legally modify the loan without my consent, then go into a foreclosure without notifying me, all the while continue to hit my credit and then use the excuse of the quit claim deed being the reason that they "didn't have to" notify me? That doesn't sound right. My point is, you can't use the quit claim deed in that way, right? It's about releasing interest in the escrow and title, NOT the mortgage obligation, and they would be equally still tied to the obligation of contacting me any time the loan has been modified or anything else they are legally obligated to do, since the quit claim deed does not release me from the loan. So they would have violated my rights as a co-borrower and either the existing loan after the mods needs to disappear, or they need to rectify the situation by renegotiating or going back to the original loan, right?
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
#6
But the goal is to be removed from the mortgage and if they basically modified the loan without my consent, wouldn't I be refinanced off?
A loan modification is completely separate from that of a refinance and cannot remove a borrower from a mortgage obligation..

Anther concern at this point is of course to get the negative points on my credit removed if at all possible. Wouldn't that possibly be an argument? It seems to me that they can't legally modify the loan without my consent, then go into a foreclosure without notifying me, all the while continue to hit my credit and then use the excuse of the quit claim deed being the reason that they "didn't have to" notify me? That doesn't sound right. My point is, you can't use the quit claim deed in that way, right?
As far as your credit rating, since you are still a borrower you will also endure the negative impact of default on the mortgage, this happens all the time as most divorced couples cannot get the others name removed from the mortgage because an assumption is very difficult to complete, and a refinance is also generally difficult for only one borrower to qualify based solely off their financial information.

However, they should have definitely required at least your signature to complete the modification, I do not know of anyway it could have gone through without it.. Have you made any contact with the lender since the divorce? If not, this is why they are not contacting you in regards to the mod/default because you are no longer living in the home (they do not have your new address unless you supplied that info) and your ex has been the one in constant contact via phone/mail etc..

So they would have violated my rights as a co-borrower and either the existing loan after the mods needs to disappear, or they need to rectify the situation by renegotiating or going back to the original loan, right?
Even if you were able to get them to cancel the modification it is not going to rectify the situation or bring the account current.. Since you are still a borrower you can contact the bank at anytime and inquire about the mortgage and what has been done.. They will let you know whether or not your signature was forged on the agreement.
 
#7
I am in a similar situation as Danielle. My ex is has been attempting to secure a loan modification but in the meantime my credit is getting trashed. She has supposedly gotten the loan modification even without my signature. How is this possible??? Since wqe mediated our divorce I had no idea and I signed a quit claim deed to the property. B of A is claiming that the divorce decree and quit claim deed justify just her signature on the loan mod paperwork. Is this true under California law?
I want two things: 1) off the loan and 2) my credit repaired. Any advice???
 
#8
This falls back to the Divorce Decree and the language of the Division of the Property. Most spouses when they divorce must obtain financing to keep a house regardless of the Quit Claim Deed.
 
#9
The divorce decree did not mention anything about the loan. It stipulated that she would buy me out of the home and estimated a dollar amount. Again this was a mediated divorce with no lawyers. The mediator was useless and offered no advice regarding financial matters.
 
#10
The divorce decree did not mention anything about the loan. It stipulated that she would buy me out of the home and estimated a dollar amount. Again this was a mediated divorce with no lawyers. The mediator was useless and offered no advice regarding financial matters.
Did she buy you out? Usually it takes a refi to do that. IN her name.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
#11
I definitely agree with Jeffrey, the only way to get your name removed from the mortgage is through an assumption or having your ex refinance the property in solely her name. Keep in mind that a quit claim deed only removes you from the deed and you are still a co-borrower on the account, meaning the account will still be reflected on your credit report regardless if your ex is the only one in the home.. Since payments were missed a refinance will not be possible and I do not see anyway to get the late marks removed form your credit report..

However, in order to complete the loan modification the bank should have required your signature as well since you are a co-borrower..
 
#12
Yes, She did "buy me out" however, there is nothing in the DD that stipulated she must assume the loan. My only recourse is to go after the bank for modifying a loan (that I am still responsible for) without my consent. Surely this must be illegal? How can a co-borrower change the terms of a loan withouth the other co-borrowers consent? Regardless of a Quit Claim Deed or a divorce decree which, as mentioned in the thread above, do not absolve me of my repsponsibility for the loan.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
#13
You are right, a loan modification should have never been finalized without your signature/authorization.. I have seen this happen many times and your ex may have possibly forged your signature to complete the transaction..
 
#14
Yes, She did "buy me out" however, there is nothing in the DD that stipulated she must assume the loan. My only recourse is to go after the bank for modifying a loan (that I am still responsible for) without my consent. Surely this must be illegal? How can a co-borrower change the terms of a loan withouth the other co-borrowers consent? Regardless of a Quit Claim Deed or a divorce decree which, as mentioned in the thread above, do not absolve me of my repsponsibility for the loan.
This is where it get complicated as the quit claim deed shows you have quit interest in the house, therefore the only borrower left with the house is eligible to make the decsions, in regard to the loan. You are still responsible for the loan also, but you have no say as you have quit claimed and have been given your settlement. The only thing she can't do is borrow more money on the house under the current financing. Keep in mind here, you made the decision to quit claim and any action against the bank would be futile in my opinion. It would also be very costly.
 
#15
True. But my uderstanding of the quit claim deed is that it removes my interest in the proceeds of the house shoud it be sold. It does not remove my interest in the loan. Therefore, decisions related to the loan require my approval. If I follow your logic and the other person is "the only one left to make eligible decisions about the loan" then why is my credit adversely effected? That does not make sense. It should just be her credit that is impacted not mine. You cant have it both ways. In other words, the quit claim deed removes me from the deed NOT the loan. So how can you argue that the Quit Claim Deed renders my consent on a loan modification irrelevant? They are mutually exclusive.
 

voxover

LoanSafe Member
#16
I have a similar story...

True. But my uderstanding of the quit claim deed is that it removes my interest in the proceeds of the house shoud it be sold. It does not remove my interest in the loan. Therefore, decisions related to the loan require my approval. If I follow your logic and the other person is "the only one left to make eligible decisions about the loan" then why is my credit adversely effected? That does not make sense. It should just be her credit that is impacted not mine. You cant have it both ways. In other words, the quit claim deed removes me from the deed NOT the loan. So how can you argue that the Quit Claim Deed renders my consent on a loan modification irrelevant? They are mutually exclusive.
My story is similar with two exceptions. The DD stipulated that my ex-wife was to assume the loan (which she did not) and the bank (GMAC) asserts that they are allowed to modify the loan without my involvement since I had quit claimed the property to my ex. However,according to GMAC, regardless of the terms and conditions of the modification, I am still liable. This seems very strange to me since the modification agreement identifies my ex as the borrower (my name is not mentioned anywhere) whereas the original note identifies both of us as co-borrowers. Further, the modification states that "As amended hereby, the provisions of the Note and Security instrument shall continue in full and effect, and the borrower acknowledges and reaffirms borrower's liability to lender thereunder. In the event of any inconsistency between this Agreement and the terms of the Note and Security Instrument, this Agreement shall govern..." (bold added by me). The modification goes on to say that "Lender does not, by its execution of this Agreement, waive any rights it may have against any person not a party hereto."

I contend that the GMAC modification identifies my ex as the sole borrower and this is an inconsistency between the modification and the terms of the Note and Security Instrument so the following must be true:
  • The Agreement supersedes the Note and Security Instrument
  • My ex is the named borrower
  • I am no longer deemed as the borrower
  • I am no longer liable
  • GMAC must remove my name from their records
  • GMAC must contact the various credit rating agencies and request that this obligation be removed from my record

Can anyone find fault with the above logic? Is anyone aware of a legal theory that would support GMAC's contention? Am I still liable because GMAC does not "waive any rights it may have against any person not a party hereto"?

Another thing to keep in mind, in addition to the credit score implications, is that if I am still liable on the loan I will also be liable for any tax consequences in the event that a portion of the loan is discharged through foreclosure or short sale.... a nontrivial consideration!

Thank you for your insights.
 
#17
Ex-husband, I signed quit claim...he didn't refinance. US Bank Mortgage, loan modification without my signature. I have read a lot of posts here, but wo

Ex-husband, I signed quit claim...he didn't refinance as supposed to and my name still on US Bank Mortgage and he got a loan modification without my signature. I have read a lot of posts here, but wondering if anyone has tried taking the mortgage company to court to fight these matters??

I don't have a lot of money, but I want to fight back and resolve my name from this loan and repair my credit scores!!

Does anyone have any further advice?

Thanks,
Samantha
 
#18
Ex-husband, I signed quit claim...he didn't refinance as supposed to and my name still on US Bank Mortgage and he got a loan modification without my signature. I have read a lot of posts here, but wondering if anyone has tried taking the mortgage company to court to fight these matters??


I don't have a lot of money, but I want to fight back and resolve my name from this loan and repair my credit scores!!


Does anyone have any further advice?


Thanks,
Samantha
 
#19
Ex-husband, I signed quit claim...he didn't refinance as supposed to and my name still on US Bank Mortgage and he got a loan modification without my signature. I have read a lot of posts here, but wondering if anyone has tried taking the mortgage company to court to fight these matters??


I don't have a lot of money, but I want to fight back and resolve my name from this loan and repair my credit scores!!


Does anyone have any further advice?


Thanks,
Samantha
The first thing you need to do is verify this and [if] you are still on the loan. If you are still on the loan and the bank gave a modification without your signature then you need to tell them to take your name off the loan. If this is a divorce deal where ex is ordered to refinance the home then the ex would be in contempt of court. Taking your bank to court is costly and their lawyers will eat you alive. I would start with the ex and then get the bank to take you off. You need to tell the bank they need your signature for the modification and they don't have one. This seems to be some post divorce issues and whatever the order of that court is will initiate the outcome of that order.
 
#20
Loan modification

Hello,
Thanks for responding! I am on the loan and I have told/ask US Bank to take my name off loan, etc. all the representatives tell me that the deed is the reason my signature wasn't needed.
How will the courts eat me alive? It seems like it would be a straight forward case, no?

Any other insight/ advice?

what do you think a lawyer would charge me for this type of case?

Thanks,
Samantha


The first thing you need to do is verify this and [if] you are still on the loan. If you are still on the loan and the bank gave a modification without your signature then you need to tell them to take your name off the loan. If this is a divorce deal where ex is ordered to refinance the home then the ex would be in contempt of court. Taking your bank to court is costly and their lawyers will eat you alive. I would start with the ex and then get the bank to take you off. You need to tell the bank they need your signature for the modification and they don't have one. This seems to be some post divorce issues and whatever the order of that court is will initiate the outcome of that order.