Minnesota couple learns the lessons of divorcing with a mortgage

At first glance, issues in the housing market concerning foreclosures may have little to do with family and divorce law. In reality, having an outstanding mortgage or dealing with foreclosure should be of acute interest to divorcing Minnesota couples. Part of the property division process is including your home mortgage, if it still has not yet been paid off. Splitting up a mortgage can be a difficult enough task in divorce proceedings, but finding out you're responsible for a mortgage after your divorce is something completely different situation.

One divorced Minnesota couple has very quickly learned the legalities of marriages, mortgages and divorce. The husband tried to stop foreclosure on his home because he listed that he was single on his mortgage application despite being married. The couple married in 2006 and two days later the man refinanced his home mortgage without his wife's knowledge. In fact, the wife knew nothing of this mortgage, so she didn't sign the application. However, two years after the couple divorced, the ex-wife was made aware of the man's mortgage issues when both of them were foreclosed upon.

Eventually, a Minnesota appeals court ruled that the man's mortgage was void because the wife didn't sign the application at the time it was filed. The court cautioned that this ruling should not be used as a way to avoid repaying loans, but came as a result of the issues concerning the couple's marriage and divorce.

More than anything else, this case highlights the importance of having a full understanding of how a mortgage acquired during the course of a marriage can affect a person even years after their divorce is settled. In most cases, couples share responsibility for a mortgage taken out during marriage, so it is vital to make sure a divorce settlement accurately and adequately addresses a couple's mortgage. Most importantly, though, it is vital to make sure that you and your spouse are up front about any assets or liabilities you may have, because that can definitely cause headaches down the road if they are not properly accounted for during divorce proceedings.

Source: MPR News, "The case of the unknowing spouse and the mortgage," Bob Collins, March 26, 2012