How To Sell A Mortgage Note from A Divorce
Divorce is hard enough — splitting up a mortgage note shouldn’t make it worse.
If you’re holding a mortgage note that was created during a divorce settlement, or you received one as part of a property division, you may be wondering:
👉 “Can I sell a Mortgage Note from a Divorce and walk away with cash?”
👉 “What if my ex-spouse is still listed on it?”
👉 “Are there legal hoops to jump through?”
The good news? Yes, you can sell a mortgage note created from a divorce — but there are a few key things you need to know first.
💔 How Divorce Leads to a Mortgage Note
Divorcing couples often agree that one spouse will keep the home, while the other receives payments over time — secured by a promissory note and mortgage or deed of trust.
This is common when:
- One spouse “buys out” the other over time
- The house can’t be sold immediately
- The court orders deferred payments on home equity
In these cases, a private mortgage note is created. It looks just like a seller-financed note — except the seller and borrower used to be married.
🏦 Why You Might Want to Sell the Note
Selling the note can offer:
- A clean financial break from your ex
- A lump sum of cash instead of monthly payments
- Freedom from collection stress or awkward communication
- Protection against missed payments or default
It also makes sense if you’re planning to:
- Buy your own home
- Pay off debt
- Avoid tracking future tax reporting
The Most Important Thing for Mortgage Note Holders
when they are looking to sell their mortgage note is getting a fair and competitive offer from a trustworthy, experienced buyer who can close quickly and handle any complexities with professionalism and discretion.
Other key factors that often matter include:
- Understanding the true value of their note (based on interest rate, payment history, property type, etc.)
- Working with a buyer who communicates clearly and transparently
- Avoiding delays and hidden fees
- Preserving their privacy and financial goals
🚨 Common Challenges When Selling a Divorce-Related Mortgage Note (And How to Overcome Them)
Selling a mortgage note that came out of a divorce agreement can feel confusing, especially when legal documents, court orders, or payment inconsistencies are involved. These notes aren’t always “clean,” and many private investors shy away from them — unless they know how to handle the unique issues.
At American Funding Group, we’ve helped countless note holders navigate these exact situations. Below are the most common challenges — and how we help you overcome them.
🧾 1. The Note Still Has Both Names On It
The Problem:
It’s very common for a divorce settlement to leave both parties’ names on the note — even if only one ex-spouse is now receiving payments. This can cause confusion about who actually owns the note, who has the legal right to sell it, and whether the borrower (usually one of the ex-spouses) needs to be notified.
Why It Matters:
A buyer like American Funding Group needs to know that you have clear authority to sell the note. If your ex is still listed as a co-lender or beneficiary, we may need a release or confirmation to prevent future legal disputes.
Our Solution:
We help:
- Review the divorce decree and note documentation
- Identify whose name is on the note, mortgage/deed of trust, and court agreement
- Recommend steps such as a Quitclaim Deed, Assignment of Note, or Release Agreement from your ex-spouse (if needed)
- Work directly with your legal counsel (if required) to ensure clarity and compliance
✅ Bottom line: You don’t need perfect paperwork to start the process. We’ll guide you step-by-step to clarify ownership and protect you legally.
🕵️♂️ 2. No Formal Note or Lien Was Recorded
The Problem:
In some divorces, the attorneys create a payment agreement — but they don’t draft or record an actual promissory note and mortgage (or deed of trust). In some cases, the only proof of the agreement is a line in the divorce decree or a private contract between the spouses.
Why It Matters:
If the agreement was never formalized or recorded with the county, a note buyer may be unsure whether they’re buying a legally enforceable asset. This is especially important if the borrower (your ex) were ever to stop paying — would the buyer have any recourse?
Our Solution:
We regularly work with “informal” divorce-related notes. Here’s what we do:
- Review all available documentation: divorce decree, separation agreement, any payment plan, or written IOUs
- In some cases, we can use a court judgment or affidavit to confirm debt validity
- If needed, we assist in formalizing the agreement into a note and recording it — protecting both buyer and seller
- We may also verify that payments have been made consistently as proof of an enforceable contract
✅ Even if the paperwork isn’t perfect, there are paths forward. You won’t be disqualified just because a lawyer skipped a step.
⚠️ 3. Your Ex Is Behind on Payments (Or Unreliable)
The Problem:
What if your ex-spouse — the person paying the note — is late, skips payments, or has a spotty history? It’s frustrating, unpredictable, and sometimes emotional. But more importantly, it affects the value of your note.
Why It Matters:
Note buyers assess payment performance as a key factor in value. If your ex has missed payments, or the account is delinquent, that’s considered a non-performing note — and it may reduce the cash value we can offer. Still, some buyers (including us) specialize in buying these “problem notes.”
Our Solution:
We evaluate the whole picture, not just a payment hiccup:
- We’ll look at the equity in the property
- Consider the borrower’s overall payment history and intent
- Evaluate the strength of documentation and legal enforceability
- Discuss your options: sell the full note at a discount, or consider a partial sale or structured payout
✅ Even if your borrower has been late, you can still sell the note. We’ve helped clients in worse situations get fair cash offers — and peace of mind.
🧠 Bonus Challenge: Emotional Strain and Ongoing Contact with Your Ex
The Problem:
Divorce is emotionally exhausting, and continuing to receive monthly payments from your ex can feel like a monthly reminder of a relationship you’re trying to move on from. Some people feel trapped in an awkward dynamic or worry about future confrontations over payments.
Why It Matters:
Emotional strain isn’t just a feeling — it’s a real reason to sell. Carrying a private note is a responsibility. If that note is tied to someone you no longer want any financial connection with, the emotional payoff of selling may be worth more than the monthly payments.
Our Solution:
We help you:
- End the financial relationship cleanly
- Convert a tricky monthly reminder into a one-time lump sum
- Avoid further negotiation, tracking, or collection calls
✅ We don’t just buy notes — we help people move on with their lives. To find out what your divorce note is worth, fill out this short form:
I’d like BEST PRICE for ALL or PART of My Note
🎯 Final Thought:
Selling a divorce-related mortgage note can seem complicated — but it doesn’t have to be. Whether the issue is ownership, paperwork, or payment problems, we’ve seen it before… and we’ve solved it.
📞 Let’s take a look at your situation and provide a fast, fair offer — no pressure, no obligation.— just expect a discount based on payment risk. Start by filling out the short form below:
💰 What Is Your Divorce Note Worth?
Just like a regular note, value depends on:
- Remaining balance and interest rate
- Property value and equity
- Payment history and borrower credit
- Documentation and legal clarity
You don’t need to figure it all out on your own — we’ll give you a free, no-obligation quote based on your exact situation.
✅ Yes, You Can Sell It — And We Can Help
At American Funding Group, we’ve worked with note holders across the country who ended up with private mortgage notes through divorce — and we helped them turn that paper into cash.
Whether you want to sell the full note or just part of it (called a partial sale), we’ll walk you through:
- Verifying legal ownership
- Clarifying borrower repayment status
- Closing quickly, often in 2-3 weeks
You’ve already been through enough. Let us help you move forward — financially and emotionally.
📞 Ready to sell your divorce-related mortgage note?
Call American Funding Group today at (772) 232-2383 for a confidential consultation or fill out the quick form above to get started.
About American Funding Group
I’m Kevin Clancy, Company President. I am a graduate of the US Coast Guard Academy. After years of military service and high-level corporate financial experience, I’ve dedicated myself to helping people prosper in real estate as one of America’s most trusted mortgage note buyers.
Our company’s core values are:
1) We do what we say, including overcoming obstacles other note buyers can’t overcome.
2) We communicate with you every step of the way so that we can close your sale ASAP.
3) And most importantly… “We treat You with respect because that’s the way we want to be treated.” That attitude has helped us become one of the most trusted note buying companies.
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See how we can help you!
American Funding Group, is a premier note investor, buying notes in all states. We specialize in residential and commercial performing real estate notes in the US. We love helping note holders who are in tough situations. We will work with you to find a win-win solution so you get the most from selling your real estate note.