Succinctly Put: NO! Now, let me tell you a story:
“Wally” and I are working to refinance a home he bought on Contract for Deed. He and his wife divorced in 2002 and over five years later, he purchased his current home on Contract for Deed (CD). When he signed the CD, it listed him and his wife as a married couple. He asked about it and was told to simply sign it to avoid from having his closing delayed.
If he didn’t sign, he would be stuck trying to find a place to live for 3-4 days as well as juggle scheduling the movers to name a few of the biggest stresses. So, he goes ahead and signs the form as-is and moves in that afternoon.
Flash forward to present and he is finally at a point to officially move this CD into a mortgage in his own name and own the home outright. Here’s the rub: A Contract for Deed is a legally filed and binding document. This means that his ex-wife, is now signed into title as his now current wife, giving her full ownership rights to the new home. HIS EX-WIFE NOW OWNS HALF OF HIS HOUSE!
In an amiable situation like this one, this can be resolved by having her sign a Quit Claim Deed that relinquishes her ownership rights. Fortunately for Wally, She was willing to sign a QCD. If she hadn’t, Wally would have a potential legal battle on his hands and I’m sure the topic of ‘Fraud’ would be brought up as well for knowingly signing a document he knew was not accurate.
Simply put, making moving arrangements or postponing them can be a huge hassle, but if there is something incorrect on your final mortgage documents, you need to take a step back and consider the long term issues that can end up being much more damaging.
-Matt
Image courtesy of phanlop88 / FreeDigitalPhotos.net
Mortgage Stories from Matt 