Deceased ex still on mortgage loan

[JEA0409]

Here are the key facts: I live in IL, We divorced in 2000, I was awarded the house And reside in it. He has not contributed to mortgage since 2000 & signed quit claim deed years ago. I never refinanced in my own name because I struggled Financially after our divorce and a refi would mean a higher interest rate and restart the process of paying more interest than principle each month. He is listed as the principle borrower, i am the co-borrower. Mortgage is not delinquent and matures in 15 yrs.

I let my mortgage company know my ex passed away last month and asked about getting his name off the loan. They said I have to refinance because they do not do loan assumptions. Now that they know my ex passed away will they force me to refi by accelerating the loan or do they not care as long as the payments are on time? Is a refi my only option? Are there any laws in IL that allow me to assume the loan in my name?

 

[JEA0409]

Here are the key facts: I live in IL, We divorced in 2000, I was awarded the house And reside in it. He has not contributed to mortgage since 2000 & signed quit claim deed years ago. I never refinanced in my own name because I struggled Financially after our divorce and a refi would mean a higher interest rate and restart the process of paying more interest than principle each month. He is listed as the principle borrower, i am the co-borrower. Mortgage is not delinquent and matures in 15 yrs. This is an FHA loan

I let my mortgage company know my ex passed away last month and asked about getting his name off the loan. They said I have to refinance because they do not do loan assumptions. Now that they know my ex passed away will they force me to refi by accelerating the loan or do they not care as long as the payments are on time? Is a refi my only option? Are there any laws in IL that allow me to assume the loan in my name?

 

[zddoodah]

Now that they know my ex passed away will they force me to refi by accelerating the loan

No.

do they not care as long as the payments are on time?

I'm sure the mortgage lender cares. However, as long as you make your mortgage payments timely, there is nothing that the lender can do legally.

Is a refi my only option?

Your only option for what?

Are there any laws in IL that allow me to assume the loan in my name?

The loan is already in your name (along with your now deceased ex-husband), right? You told us that your ex is "listed as the principle [sic] borrower," but I'm not sure what you think that means or what significance you think it has that he is listed (on what?) as the "principal borrower."

 

[adjusterjack]

signed quit claim deed years ago.

I hope it was recorded. If not, get it recorded ASAP.

He is listed as the principle borrower, i am the co-borrower.

What Zddoodah is saying, in his roundabout way, is that you and your husband were equal borrowers. While it's been an archaic custom to list the husband first on a mortgage, that the husband is the principal (not principle) borrower is a common misconception.

Now that they know my ex passed away will they force me to refi by accelerating the loan

No, they can't force you. I suggest you take out your mortgage loan contract and study it carefully. There is no provision for accelerating the loan when one of the borrowers dies.

Are there any laws in IL that allow me to assume the loan in my name?

The loan is effectively in your name with the death of your ex-husband. No need to assume it or refinance.

Assuming you and he bought the house several years before your divorce, you must be pretty close to paying off the loan. Keep at it and soon you will be able to kiss the mortgage company goodbye and join the ranks of we who enjoy owning our homes free and clear.

 

[Litigator22]

. . . . and join the ranks of we who enjoy owning our homes free and clear.

Perhaps next you might join the ranks of those that are equally highly pleased of it, but don't vaunt of it.

"We have confidence in our strengths without boasting of it and respect that of others without fearing it." (Thomas Jefferson)

 

[Taxing Matters]

No, they can't force you. I suggest you take out your mortgage loan contract and study it carefully. There is no provision for accelerating the loan when one of the borrowers dies.

That's not true. Many loans do have such clauses. But most home mortgages today will have language that follows the federal Garmin-St. Germain Act. I'll not get into the details of that Act except to say that the death of a co-owner where the property was held in joint tenancy or tenants by the entirety cannot result result in triggering a due on sale clause, nor can a transfer of the interest of deceased spouse to the surviving spouse trigger the due on sale clause. Nor is the clause triggered when one spouse gets the other's interest in it by divorce.

In this case, the transfer of the home pursuant to a divorce decree 22 years ago was covered by the Act. Ever since, the OP has evidently been the sole owner of the home. The death of a borrower who is not an owner of the home is not covered by the Act. So if there is a due on sale clause in the deed the bank could accelerate the loan if it chose to do so. But if there is not much left on the loan to pay the lender may not bother as long as it gets its payments.

Recording the quit claim deed may be helpful but as long as the court specifically granted her sole ownership of the home it should not matter. In the states I'm familiar with recording the court order would be sufficient.

I think the OP ought to see a real estate attorney before doing anything. Under the facts we know so far I see some potential for problems if the lender becomes aware of what happened. It may be best to just let sleeping dogs lie, especially if the loan is soon to be paid.

 

[JEA0409]

So thanks for the input. I want my ex’s name off the loans for the following reasons.

1. twice within the past 8 years my escrow acct had a surplus and the mortgage co sent a check made out to me and my ex. My ex had no objection to me getting the check, but he lived 10 hrs away making it harder to figure out a way to cash it. The mortgage co said by law they have to make the check payable to both of us because we are both on the mortgage. Once it was a $800 check - I had to get my ex to sign something stating he agreed to the escrow overage amount being applied towards the next payment. This scenario will be more complicated if it happens again.

2. The mortgage co is reporting to the credit bureaus for my ex, but not me. I pay on time and would like it to start being reflected on my credit report.

 

[Litigator22]

So thanks for the input. I want my ex’s name off the loans for the following reasons.

1. twice within the past 8 years my escrow acct had a surplus and the mortgage co sent a check made out to me and my ex. My ex had no objection to me getting the check, but he lived 10 hrs away making it harder to figure out a way to cash it. The mortgage co said by law they have to make the check payable to both of us because we are both on the mortgage. Once it was a $800 check - I had to get my ex to sign something stating he agreed to the escrow overage amount being applied towards the next payment. This scenario will be more complicated if it happens again.

2. The mortgage co is reporting to the credit bureaus for my ex, but not me. I pay on time and would like it to start being reflected on my credit report.

Oddly, twice now you've shown no reaction to the two responders voicing concerns as to the status of record title to the home.

Seemingly, based on your bare offering that: (1) "the court awarded you the home" and (2) "your ex signed a quitclaim deed" you are taking it for granted that those official county real property records will show you as the sole owner of the home. And that is a dangerous assumption and one that may or may not be warranted and certainly not to be adequately addressed here.

What is critically missing from your brief narrative is any mention of either the quitclaim deed or an appropriate abstract of the decree of divorce being properly recorded, or even being suitable for recording!

I use the words "suitable for recording" advisedly noting that there are essential particulars needed to be present before any writing meant to demonstrate a conveyance of an interest in real property is acceptable for recording.

Maybe all is well, or if not, can be remedied. But only your attorney will know.

This business of record title to the home (which is the only acceptable proof of ownership) is far more critical than you appear to recognize.

 

[JEA0409]

I’m not sure what kind of reaction you are looking for or why you think it’s odd I didn’t react. I’m certainly not trying to hide anything. My divorce decree was properly handled in court by my attorney. The quit claim deed was handled by a real estate attorney and also filed in court. When I look up my property on my county website it shows me as the property owner - my ex‘s name is no longer listed as it was in the past. His name also no longer appears on the property tax assessment sent biannually By the county.

I do realize that proof of ownership is critical, but I’m confident everything is in order there. Because of that I didn’t think I needed to prove that my divorce decree and the quit claim deed we’re properly recorded.

 

[adjusterjack]

I want my ex’s name off the loans

Unfortunately, you ex's name will not come off unless you refinance in your own name. That's just the way it is.

Checks will continue to be made out to the two of you. Payments will be noted on his credit report.

Worse, if your homeowners insurance has both your names on it, claim checks will be made out to both of you. It's something that a lot of people overlook because they don't look at their policies. Not saying that's the case with you, just making an observation.