Mortgage and Divorce

C

Candy Crush

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Messages
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Hi

I'm recently divorced. It was messy, as my now ex has lived in SouthEast Asia for the past 20 years and I have been paying off the mortgage on the family home for all this time. He totally refused to co-operate by giving me an address where we could send the divorce documents. The divorce was finally granted, following multiple advertisements placed in newspapers in the relevant country, putting him on notice that this was happening.

One of the Ancillary Orders of the divorce reads as follows:

An Order pursuant to Section 15(1)(b) of the Family Law (Divorce) Act, 1996 and Section 36 ofthe Family Law (Divorce) Act, 1995, confirming that the Applicant is entitled to, and should be registered as full owner of the property being the family home which is the property at XXXXXXX and directing The Registrar of Titles to amend the Title in order to register the Applicant as the sole owner of the premises contained in Folio XXXXXXXX of the Register of Freeholders County XXXXXXX

This has been done, and I got a document from Land Registry, confirming me as full owner.

I approached the lending institution today to ask them to remove my ex partners name from the mortgage. I produced my Divorce Decree and the Land Registry document. They said they would need his signature, agreeing to be removed from the mortgage. I explained the situation, and told them that that was not going to be possible.
Then the bank person pointed to another of the Ancillary Orders attached to the divorce which reads as follows:-

Direct that the Applicant discharge the balance of the mortgage repayment on the family home and indemnify the Respondent in respect of same.

What exactly does this mean? Specifically in terms of me getting him taken off the paperwork for the mortgage. The bank seemed to think it was a huge deal. As previously stated, I have paid the mortgage by myself for the past 20 years, I paid a fortune for a complicated divorce, and I just want all loose ends tied up now.

I'd be very grateful if somebody could explain the significance of this second Ancillary Order.

Many thanks

CC
 
Why are you so anxious to have your ex taken off the mortgage?

You are registered as full owner of the property - why do you care whether or not your ex is on the mortgage?

The second ancillary order basically means that you alone are responsible for discharging the mortgage, even if it remains in your joint names.
 
Fair enough. I just got a bit riled yesterday when a Certificate of Interest paid last year arrived in the post. It irked me to see two names on it.

Thanks, though.
CC
 
Nordkapp said:
But will he still be on the deeds of the house when the mortgage is paid?
Click to expand...
No. Since he's not on them any longer.
Candy Crush said:
An Order pursuant to Section 15(1)(b) of the Family Law (Divorce) Act, 1996 and Section 36 ofthe Family Law (Divorce) Act, 1995, confirming that the Applicant is entitled to, and should be registered as full owner of the property being the family home which is the property at XXXXXXX and directing The Registrar of Titles to amend the Title in order to register the Applicant as the sole owner of the premises contained in Folio XXXXXXXX of the Register of Freeholders County XXXXXXX

This has been done, and I got a document from Land Registry, confirming me as full owner.
Click to expand...
 
Candy Crush said:
Direct that the Applicant discharge the balance of the mortgage repayment on the family home and indemnify the Respondent in respect of same.

What exactly does this mean?
Click to expand...
It means you have to continue paying off the mortgage until it is fully cleared. And, if you fail to to this, and the bank chases your ex for his share of the loan, you have to indemnify your ex for any liablity, costs, expenses, etc that he incurs because of this.
Candy Crush said:
The bank seemed to think it was a huge deal.
Click to expand...
It is a big deal — for the bank. Right now, the bank has a loan extended jointly to two people — CC and EX. If they need to enforce that loan they have a range of measures open to them. They can:
  1. enforce their security over the house
  2. sue CC for the recovery of the debt
  3. sue EX for the recovery of the debt
  4. sue CC and EX together for the recovery of the debt.
They can pursue any or all of these, simultaneously or one at a time, in any order they like, depending on what they think will be most effective at getting them their money at the earliest date.

(If they do either 3 or 4, because of the indemnity you have to repay EX for anything the bank gets from him, plus you have to pay his legal costs. But the bank doesn't care about that. They can sue EX and enforce any judgment they get against all his income and assets, and what happens as a result between you and EX is nothing to them.)

If they discharge EX from the loan, then they only have options 1 and 2 open to them. Their options are narrowed and their security is reduced to the value of the house, plus whatever they can recover by suing you from your income and other assets. Therefore, the loan is less well-secured. And, in principal, they don't like that. After all, they never agreed to advance a loan to you alone.

I don't know the exact facts of your case, but it's very likely that in reality 1 and 2 are more than enough to give the bank any reassurance it could reasonably want. The mortgage is over 20 years old, so (assuming you have serviced it when due at all times) the outstanding amount is likely to be relatively small, relative to the value of the house, and relative also to your own income and your capacity to pay. So you might think any risk or detriment to the bank from releasing EX from the loan is pretty token. But, from the bank's point of view, there's no reason why they should accept any risk or detriment at all, however small. And they would argue that the fact of EX still being jointly liable for repayment of the loan with you doesn't disadvantage you in any way — especially if you pay off the loan as you intend to.
 
Thank you all very much. Really interesting replies. And yes, the end of the mortgage is in sight, so I will keep my head down, keep paying it and keep my fingers crossed.

Thanks again

CC
 
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