Title to Property Only in One Spouse's Name?

Title to property in only one spouse’s name?

Something that comes up more than we would expect is where one spouse is on title to the property  but the other party is not. Property was acquired during the marriage, but when a piece of property is purchased during the marriage and at some point refinanced and one spouse is removed from title because of some bank or loan requirement, this can create an issue. This can also occur due to agreements between spouses during the marriage and a whole host of other reasons. Would the spouse whose name is taken off title (or was never on title) going to lose an ownership interest in the house?

 Title to property definitely will matter in family law cases, especially if one spouse is attempting to take an interest that was not intended. A presumption in California in the CA Evidence Code Section 662 states, “The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.”

Title presumption can conflict with other family law statutes and California case law that has come down over the years. For example, in some situations, there may be a presumption by California law that if a spouse is removed from title during the marriage, there was undue influence ( the transaction was not knowing, voluntary and consensual). This presumption would need to be overcome by the person who wants to claim the property should be divided according to its title.

Due to the volatile real estate market and the foreclosure issues that resulted, many people may have obtained second mortgages, refinanced multiple times, traded up or down and lost money, switched properties to leverage cash, rented out property to gain cash, and basically may have been forced to spend money when they didn't have it, or to have lost income due to the market conditions.  Further, many underwater mortgages suffered further harm because banks and servicers were not tightly controlled. Under the Home Owners Bill of Rights, (HBOR) which took effect January 1, 2013, servicers in particular, are now held to a much higher standard, and must do much more than they ever had to do in order to push the notice of default.  In many instances the owners do not even know who owns their loan, and if a servicer is not the lender, it starts to become fuzzy when things go wrong. Some clients are told to NOT pay for their mortgage, and some clients are told if they pay their mortgage, they cannot get a modification. There are now many different programs that might work for distressed owners, but generally it is not required to miss payments in order to obtain a modification. Errant treatment by lenders has created a large amount of foreclosure cases, and the cases that fall under HBOR will have in most cases, the best chances of recovery due to the more stringent regulations.