Names on Title Versus Names on Mortgage

[necoates]

My question involves a foreclosure in the State of: Arizona

Hello,

My girlfriend and I own a home that is way underwater in the property value versus the loan value and it may end up in foreclosure.

My question is this, my name is the only one on the mortgage, but both of our names are on the title to the home. Will a foreclosure still effect her credit as she is not on the note but she is on the title?

Thanks in advance!

[jk]

it shouldn;t as she does not owe for the mortgage. Curious how you got her name on the title and not the mortgage though. Most lenders require all title holders to be on the mortgage and vice versa.

[necoates]

I was also thinking that if the mortgage in my name goes into default, but here name is also on the title, (I checked that is how mine is, my name on the mortgage, both of our names on the title)what are the legal ramifications as far as the bank trying to foreclose on a property that only one of the title holders is in default?

Does the non defaulting party have any recourse?

[jk]

how is title held and did you add her to the title some time after the original purchase?

[OhMy]

If her name was never on the mortgage it will not go onto her credit report.

Only the actual mortgage signers will have the FICO score hit.

As far as her name on the deed, that will just be removed in the foreclosure process.

If the home is on less then 2.5 acres and is a one or two family home there would be NO deficiency judgment in AZ

[jk]

As far as her name on the deed, that will just be removed in the foreclosure process.
Z

I disagree with you on this point. If a title is held in common with the co-tenants, the bank cannot foreclose on the share owned by another party. The debtor, in actuality, does not own the entire house.

that is why how title is held is important and if the gal was added to the title after the mortgage was recorded. Is name added later, the bank can argue fraudulent transfer and seek to have the transfer rescinded.

[necoates]

Originally it was my name on loan and my name on title, during a refinance her name was added to the title, but I remained the only name on the loan.

[jk]

so, as long as they were aware of how you were titling, there is no fraud but, did they know? This is a bit unusual.

I guess since you intend on allowing the foreclosure, anything else is truly irrelevant other than; her credit should not be injured.

[necoates]

They saw the same paperwork as I did? So I have to assume they were aware of who was on the title.