Jan282026
Real Estate Q&A Series

What happens if my former spouse signs a quitclaim deed but there is still a mortgage on the property? – North Carolina

Short Answer

In North Carolina, a quitclaim deed can transfer whatever ownership interest a former spouse has in the home, but it does not change the mortgage. If both spouses signed the promissory note, the lender can still treat both as responsible for the debt until the loan is paid off, refinanced, or formally assumed (if the lender allows it). The mortgage lien also stays on the property, so missed payments can still lead to foreclosure even after the deed is signed and recorded.

Understanding the Problem

In North Carolina, can a former spouse sign a quitclaim deed to transfer a home into one spouse’s name while a mortgage (or deed of trust) is still in place, and what happens to the loan obligation after that transfer? This question usually comes up after separation or divorce when one spouse wants clear title in a single name, but the loan paperwork still lists both spouses. The key decision point is whether the goal is only to change the deed (ownership) or also to remove a former spouse from the mortgage debt.

Apply the Law

North Carolina law allows ownership of real property to be transferred by deed, including between spouses or former spouses. But a deed changes title, not the underlying loan contract. A mortgage loan typically has two parts: (1) the promissory note (the promise to repay) and (2) the deed of trust (the lien on the property that secures repayment). A quitclaim deed can move the ownership interest, but it does not release anyone from the note, and it does not remove the deed of trust from the property.

Key Requirements

  • Valid transfer of title: The quitclaim deed must be properly signed and acknowledged (notarized) and then recorded with the county Register of Deeds so the public record reflects the change in ownership.
  • Mortgage stays as a lien: The deed of trust remains attached to the property until the loan is paid off or the lender records a release after payoff.
  • Personal liability depends on the note: Whoever signed the promissory note generally remains personally responsible to the lender, even if that person later signs away ownership by quitclaim deed.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the former spouse is willing to sign a quitclaim deed so the property can be transferred into the client’s name. That deed can transfer the former spouse’s ownership interest, but it will not remove the existing mortgage lien from the property. If the former spouse is also on the promissory note, the lender can still hold the former spouse responsible for payment even after the quitclaim deed is recorded, because the deed does not rewrite the loan contract.

Process & Timing

  1. Who files: The spouse receiving the property (or the closing attorney/title company handling the transfer). Where: The county Register of Deeds where the property is located. What: A properly executed and notarized quitclaim deed (and any required county deed cover sheet/transfer information used locally). When: As soon as practical after signing, because recording protects the public chain of title.
  2. Confirm the loan status: Obtain the current mortgage statement and confirm who is on the promissory note and who signed the deed of trust. This determines whether the former spouse still has personal liability and whether the lender must be involved to remove a name from the debt.
  3. Plan the “mortgage fix”: If the goal is to remove a former spouse from the mortgage, the usual path is a refinance into one borrower’s name or a lender-approved assumption/release (if available). After payoff or approved change, the lender records a release or new deed of trust is recorded as part of the refinance.

Exceptions & Pitfalls

  • “Title is in one name” does not mean “loan is in one name”: A quitclaim deed can leave the former spouse off the deed but still on the note, which can keep the former spouse financially exposed and can complicate future borrowing for both parties.
  • Due-on-sale / lender consent issues: Some loan documents restrict transfers of ownership without lender consent. Even when a transfer is allowed in a divorce context, lenders often still require a refinance or formal assumption to remove a borrower from the debt.
  • Recording and drafting mistakes: An incorrectly prepared deed (wrong legal description, wrong vesting, missing notary acknowledgment) can create a title problem that shows up later during refinance or sale.
  • Divorce orders vs. lender rights: A separation agreement or court order can allocate who must pay the mortgage between former spouses, but it usually does not bind the lender unless the lender agrees in writing.

Conclusion

In North Carolina, a quitclaim deed can transfer a former spouse’s ownership interest, but it does not remove the existing mortgage or change who the lender can pursue for payment under the promissory note. The deed of trust remains a lien on the property until the loan is paid off or replaced. The practical next step is to record the signed deed with the county Register of Deeds and then address the mortgage by refinancing or pursuing a lender-approved assumption as soon as possible.

Talk to a Real Estate Attorney

If a former spouse is willing to sign a quitclaim deed but the mortgage is still in place, a real estate attorney can help confirm what the deed will (and will not) accomplish, coordinate recording, and plan the cleanest path to refinance or lender approval. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Real Estate Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.