Q: If a spouse refinances a home ALONE when deed is in both names(married at the time)is the mortgage considered DEFECTIVE?
A: It depends on how title is held. If title is held as Tenants in common (refer to your deed to determine how title is held) then the deed of trust is effective as against the individuals divided interest. If the property is held as tenants by the entirety (common for married people) then the lien of the deed of trust is defective. The obligation under the promissory note is valid but the lien on the property is not. It would be very unusual for a lender to loan money to one spouse without having the other spouse consent to the lien on the property.
A: My office is full of cases involving this mistake by mortgage companies. The lien simply does not attach to tenants-by-the-entierties owned property unless BOTH spouses execute the lien instrument.
But that is NOT the end of the issue. If one spouse borrowed, and money was used to pay off prior joint debts (a prior mortgage), then the lender can get a judgment ordering that it has a lien to the extent of the payoff of the prior lien.
Get to a lawyer's office and discuss this! Don't fight a war where you win the first battle, and then lose every other issue down the line.
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