If My Name is on the Deed But Not the Mortgage, Am I Financially Responsible?

If a person’s name appears on the Deed of a property but not on the Mortgage against that property, there is the potential for financial loss — but not responsibility.

A Deed is a document that indicates ownership of real property.

A Mortgage secures a loan. When recorded, the mortgage creates a lien on the real property by the lender, one which can be foreclosed upon if the loan is not repaid per the terms of the loan documents.

If a person has signed a loan agreement or promissory note, he or she is obligated to repay the loan.

If a person’s name is on the deed but did not sign a loan agreement or promissory note, he or she is not directly obligated to repay the loan.

However, if there is a mortgage on the real property securing the loan, the person(s) listed on the deed may lose his or her ownership of the property in the event a foreclosure action occurs.

At foreclosure, the property is sold through a judicial sale and the proceeds are used to pay the liens and mortgages on the property. The judicial sale will transfer ownership to that third party purchaser – usually, the high bidder at the judicial sale.