DEAR BOB: My wife and I divorced last year. Her name isstill on the mortgage. She wants her name taken off. She signed a quitclaimdeed. I sent this to the mortgage company asking them to take her name off. Ido not want to refinance because the mortgage has a good interest rate. Themortgage company refused to remove my ex-wife from the mortgage obligation. Isthere any way to do this without refinancing or selling? –Michael T.
DEAR MICHAEL: No. There is nothing your ex-wife can do toget her name off the mortgage obligation. If she had a good divorce attorney,he or she would have insisted you refinance in your name alone so she could befree of that mortgage obligation on her credit reports.
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Since that wasn’t done as part of the divorce agreement,although your ex-wife’s name is off the title after you recorded that quitclaimdeed, her name remains on the mortgage until you refinance or sell. If you makethe monthly payments on time, that will reflect well on her credit reports andFICO (Fair Isaac Corp.) credit score.
NO REAL DIFFERENCE BETWEEN LIVING TRUST AND AN INHERITANCE
DEAR BOB: My grandmother passed away a few months ago. Sheowned a free-and-clear house. As part of her living trust, my two sisters, mydad, his three sisters and I are to sell the house and divide the profitevenly. What is the difference between a living trust and an inheritance? Arethey taxed differently? –Elizabeth C.
DEAR ELIZABETH: Be very thankful your grandmother wiselyheld title to her house in her living trust. The result is probate court costsand delays are avoided.
Since you and the other heirs inherited the property, youare entitled to a new “stepped-up basis” to market value on the dateof your grandmother’s death. The fact she held title in her living trust isirrelevant. You still get the stepped-up basis. That means if the house sellsfor the same market value, no capital gains tax will be due.
However, if your grandmother died in 2006 and if her totalnet estate exceeds $2 million, then an estate tax might be due before title tothe house can be distributed to the heirs to sell. For full details, pleaseconsult your tax adviser.
WHAT HAPPENS AFTER CARRYBACK MORTGAGE LENDER DIES?
DEAR BOB: You had a recent item about home seller carrybackmortgages. You cited an advantage is the seller can foreclose if the buyerdefaults. But what about a buyer whose sellers carried back the mortgage andthey die? How is the buyer protected? –Kathy S.
DEAR KATHY: After the seller-lender dies, the home buyercontinues making monthly mortgage payments to either the estate or to whomeverinherited their assets.
When the mortgage is fully paid off, either the estateexecutor or the heirs will execute a Satisfaction of Mortgage or a Deed ofReconveyance to clear the loan obligation from the title. In other words, thedeath of the mortgage carryback seller-lender is not a big problem for the homebuyer who obtained the seller financing benefits.
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(For more information on Bob Bruss publications, visit his
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Copyright 2006 Inman News