The DEED vs The NOTE
Notes and deeds are both legal documents, but that’s the only thing they have in common.
The Deed are legal documents that transfer property rights such as ownership. That party signs the deed and gives it to the recipient. Once the recipient has the deed, they have ownership of whatever rights that deed conveys.
A note is a document that describes the terms of a loan. It’s a private document that you sign to promise to pay back your lender.
I have a lot of clients who come in and they are in a divorce situation. One spouse may say that the other spouse DEEDED the property over. This is very common in a divorce situation. Unfortunately, this doesn’t necessarily mean for a short sale that the spouse who DEEDED the property over is no longer liable for the debt associated with the note on the property. So what does that mean? Well, they may have to participate in a short sale even though they don’t own the property.
This is because they signed the note associated with the property. The DEED represents who owns the property. Where the NOTE is who is liable for repayment of the debt, and YES, it can be different people on both. For example, a parent, who buys a property for a child, may take on the loan and repayment, where the child owns the home. It’s not common, but it happens.
The homeowner can possibly get away with not having a spouse to participate in a short sale if they have a divorce decree that stipulates either one spouse or the other is solely responsible for the property. There are very few ways to get around it though. You may end up in a situation where an ex MUST participate in the short sale even though they no longer OWN the property.
This is important for you when you are setting up your listing or you’re doing your intake with your homeowner and they say they have an ex-spouse but they no longer own the home. So, you may need to check on a mortgage statement if the spouse’s name appears. If the spouse’s name appears on the mortgage statement chances are they may have to participate in a short sale. However, a divorce decree stating otherwise may help you.
For Realtors, Attorneys, Title companies, etc interested in our services please go to http://massachusettslossmitigation.com/
For homeowners needing assistance with avoiding foreclosure please go to http://shortsalemitigation.net/
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Tewksbury, MA 01876
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