What is the purpose of a Deed of Trust to Secure Assumption after a divorce?

This property circumstance arises because the bank that has the note on the marital house is not part of your divorce negotiation. Since the house was community debt, meaning you are both obligated on the loan for the house to the bank, if you fail to pay the note, the bank would then seek payment on the deficiency from the former spouse. That would adversely affect your former spouse’s credit. In this situation you are awarded the house in the divorce, so your spouse signs a Special Warranty Deed in your favor, transferring his interest in the house to you. In return, the law in Texas requires that you sign a Deed of Trust to Secure Assumption (“DOTSA”), promising that you will timely pay the note on the house. If you fail to pay the note, your former spouse can pay the note and seek for you to repay him. Ultimately, he could foreclose on you before the bank. But you would have the opportunity to pay him back before any foreclosure could take place. Remarkably, a bad outcome in which one spouse forecloses on the other with a DOTSA is rare. In over 20 years of practice, I have only seen this twice.



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