Understanding how to access mortgage information after a divorce can be challenging, especially if you are awarded the marital home but are not listed on the current mortgage. This process involves becoming a Successor of Interest, and it's essential to know your rights and the necessary steps to gain access.
Becoming a Successor of Interest: Often, only one spouse is listed on the mortgage for the marital home. A mortgage is a binding contract between the lender and the borrower, and a divorce decree does not alter this agreement. When the spouse awarded the marital home isn’t on the current mortgage and has no immediate plans to refinance, they become a Successor of Interest.
Rights of Successor Homeowners After Divorce: For spouses awarded ownership of the marital home but not obligated on the existing mortgage, accessing current mortgage information can be a hurdle. Significant amendments to the CFPB’s RESPA and TILA mortgage servicing rules, effective April 19, 2018, extend protections to successors in interest, including those awarded the home in a divorce.
Understanding the New Mortgage Servicing Rules: These new rules redefine “borrower” under RESPA and “consumer” under TILA to include confirmed successors in interest. This includes transfers related to divorce or separation agreements, transfers to a spouse or children, or to a trust where the borrower is a beneficiary. Once a servicer confirms a successor’s identity and ownership interest, these successors are entitled to mortgage servicing protections, including loan modifications, dispute rights, monthly statements, and more.
How to Confirm Successor in Interest Status: The CFPB has established a “Request for Information” process under RESPA § 1024.36(i). When a servicer receives a written request indicating a person may be a successor in interest, along with the name of the transferor borrower and sufficient information to identify the loan, the servicer must provide a written description of the required documents to confirm the person’s identity and ownership interest. The servicer must acknowledge receipt within five business days and respond substantively within thirty business days.
The Role of a Certified Divorce Lending Professional (CDLP®): A CDLP® adds immense value to the divorce team during the settlement process due to their comprehensive understanding of family law, tax law, real estate, and mortgage financing. They help ensure a successful divorce settlement by integrating mortgage options into the overall financial goals of both spouses.
Benefits of Working with a CDLP®:
- Holistic Approach: Evaluates mortgage options in the context of the divorcing couple’s financial objectives.
- Informed Decisions: Helps divorcing homeowners make informed decisions about home equity solutions.
- Conflict Resolution: Identifies and resolves potential conflicts between the divorce settlement, home equity solutions, and real property issues.
- Future Planning: Assists in securing new mortgage financing post-divorce.
Get Your Free Divorce Mortgage Workbook: Contact a CDLP® today for a copy of the "Divorcing Your Mortgage Homeowner Workbook." This guide helps you get organized, prepared, and understand your mortgage financing options, whether refinancing the marital home in an Equity Buyout situation or planning to sell and purchase a new home post-divorce.
Conclusion: Involving a Certified Divorce Lending Professional (CDLP®) early in the divorce settlement process is crucial for setting the stage for successful mortgage financing in the future. Their expertise in Divorce Mortgage Planning ensures that both spouses can achieve their financial and homeownership goals post-divorce.
Disclaimer: This information is for informational purposes only and not intended as legal or tax advice. Contact an attorney or tax professional for legal and tax advice. Interest rates and fees are estimates and subject to market changes. This is not a commitment to lend. Rates change daily—call for current quotations. The information in this newsletter is prepared by an independent third party and distributed for consumer education purposes.
This is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact an attorney or tax professional to obtain legal and tax advice. Interest rates and fees are estimates provided for informational purposes only and are subject to market changes. This is not a commitment to lend. Rates change daily – call for current quotations. The information contained in this newsletter has been prepared by, or purchased from, an independent third party and is distributed for consumer education purposes.
Copyright 2021—All Rights Divorce Lending Association
