09/08/2026
A costly misconception in divorce settlements:
Three states now require conventional mortgages to be assumable in a divorce. What many attorneys, mediators, and homeowners don't realize is that an assumption does not automatically release the departing spouse from the loan.
I've had five conversations this year with attorneys who believed these laws meant the spouse leaving the property was no longer responsible for the mortgage. They are not.
A quitclaim deed transfers ownership of the property. It does not transfer responsibility for the debt.
Consider these examples:
Example #1 John and Sarah divorce. Sarah keeps the home and receives John's interest through a quitclaim deed. Sarah continues making the payments, but John's name remains on the mortgage.
Five years later, Sarah loses her job and misses several mortgage payments.
Result: The late payments can damage both Sarah's and John's credit because John is still legally obligated on the loan.
Example #2 During settlement negotiations, both parties assume that because state law allows an assumption, the departing spouse is automatically removed from the mortgage.
Result: Years later, they discover the lender never released the departing spouse from liability, creating unexpected financial and credit consequences neither party anticipated.
The takeaway:
✅ Property ownership and mortgage liability are two separate issues.
✅ A quitclaim deed transfers title.
✅ An assumption may transfer the obligation to make payments.
✅ Neither automatically releases the departing spouse unless the lender specifically approves and documents that release.
For family law professionals, understanding this distinction can prevent significant problems long after the divorce decree is signed.
Before finalizing a settlement, make sure you're addressing both who owns the property and who remains liable for the mortgage debt.
Three states now require conventional mortgages to be assumable in a divorce. Not one of them releases the departing spouse from the loan. Maryland, Virginia, and California have each enacted statutes requiring lenders to include an assumption provision when a marriage ends. I read all three in thei...
