In divorce proceedings, careful disposition of real estate is vital
I have no guarantee that the mortgage will be paid off. What happens if I sign the deed, she dies with the mortgage still active and I'm off the title to the home? She went straight for a name change. Is there trickery here?
However, if your former spouse is unable to refinance the home due to financial issues, or if the home is under water (where the debt on the home exceeds its value), the documents you previously agreed to might bind you to convey title to the home even if the mortgage has not been not paid off.
While the mediation indicated that your former spouse would be liable for the debt on the home and all expenses from the home, you should have insisted that she refinance the property, pay off the old loan and move on with the home in her name alone, with a mortgage only in her name.
It appears this ideal scenario has eluded you and you're now in a situation where the court will force you to convey title of the home to your ex-spouse. You are correct that having your name on the mortgage still carries the risk that your credit will be hurt if your ex-spouse fails to make every payment on time. You'd be in that same situation if you were on title, unless you came up with the money to pay cover mortgage payment. In either case, you'd have to pay money to protect the title to the home and your personal credit.
If your former wife has the money to pay the mortgage but does not do so, the mediation or divorce documents might give you the right to go after her for failure to make those payments. While your credit situation would be at risk until she either sells the home or refinances the mortgage, the only consolation you have is the divorce documents that you can send to the credit reporting bureaus indicating that a court ordered you to convey title to your ex-spouse and that she became liable for debts on the home.
Your credit score might still be affected by the failure to make payments on the loan, but your future creditors will see a viable explanation for late payments on the mortgage, missed payments, or other matters having to do with the home.
If you can find a way to have your ex-spouse refinance the loan, you'd be better off. If you can't, you might not be much worse off than you are now with a court ordering you to sign the deed over to her.
(Ilyce R. Glink's latest book is "Buy, Close, Move In!" Samuel J. Tamkin is a Chicago-based real estate attorney. If you have questions, you can call Ilyce's radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. Contact Ilyce and Sam through her website, http://www.thinkglink.com.)