Why would adivorceagreement require a re-financing provision?

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Why would adivorceagreement require a re-financing provision?

A couple is getting a divorced. The wife is keeping the home and all the possessions; the husband is keeping a commercial building which is rented. Why would she put in the divorce agreement that they must refinance at the same time? This is an ugly, ugly divorce and she wants to destroy him. He is giving her basically everything but this request seems odd to me and his attorney has no idea why she would request that.

Asked on September 13, 2010 under Family Law, Vermont

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You mean that they each re-finance to remove the others name from the property?  That scenario would be in your best interest as well.  What if your name was still on the home and she defaulted on the mortgage? Remember: the bank or finance company is not a party to the divorce and is not bound by your agreements.  So she defaults and lets the property go practically in to foreclosure and then they start coming after you and reporting the problems and there goes your credit rating.  Yes, you consider the property hers but the bank does not. Maybe the way it is worded is odd or maybe it is wise: you both need to make sure that you walk away from each other and that you take with you the property you have agreed without strings attached.  A deed is a long string.  Good luck.  


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