HOMESTEAD RIGHTS: PROTECTING THE FAMILY HOME
Impact on Refinancing: When refinancing a primary residence, lenders
may require the non-titled spouse to sign certain mortgage documents
to ensure the new mortgage lien takes priority over any existing
homestead rights. This is because homestead rights can pose a
significant risk to lenders. If the non-titled spouse does not sign off,
they could potentially challenge the validity of the lien in the future,
complicating foreclosure proceedings if the loan defaults. Lenders
mitigate this risk by requiring the non-titled spouse’s signature,
ensuring the new mortgage lien is clear and enforceable.
The Implications of Separation and Divorce
The requirement for a non-titled spouse to sign mortgage and title
documents can become particularly contentious when the spouses are
separated or in the process of getting a divorce. In these cases, the non-
titled spouse’s legal rights to the property do not automatically dissolve
simply because the couple is no longer living together or has initiated
divorce proceedings.
Separation and Continued Marital Rights: Legal separation does not
terminate marital rights, including homestead rights in many states.
As long as the spouses are legally married, the non-titled spouse may
still have a legal claim to the marital home, regardless of whether they
live there or not. This means that even if one spouse has moved out,
they must still sign off on the sale or refinancing of the home to
ensure that their rights are not violated.
06 DIVORCE REAL ESTATE & MORTGAGE JOURNAL
The marital home
often carries hidden
costs in divorce,
including not just
mortgage payments
but also taxes,
maintenance, and
long-term
affordability
concerns.
Overlooking these
financial factors can
lead to significant
challenges for
divorcing
homeowners,
impacting their post-
divorce financial
stability.
Divorce Proceedings: During divorce proceedings, the division of marital property is often one of the
most contentious issues. Until a divorce is finalized and the property is formally divided by a court order
or settlement agreement, both spouses typically retain an interest in the marital home. This interest can
complicate attempts to refinance or sell the property, as the non-titled spouse must still be involved in the
transaction. Even if the couple agrees that one spouse will keep the home, the other spouse’s signature
may be required to release any claims or rights to the property, ensuring a clear title.