Divorcing homeowners in Utah frequently run into mortgage servicer roadblocks when trying to refinance or have a spouse removed from a loan, even when the divorce decree says so. This blog explains why those problems happen, the Consumer Financial Protection Bureau’s findings on servicer missteps, what Utah courts can and cannot enforce under Rule 7B and Rule 70, and how both spouses can better plan to avoid financial harm.
Most people who divorce think that once the judge signs the decree ordering one spouse to refinance the home or take the other spouse off the mortgage, the paperwork and liability switch are just “bureaucratic detail.” In practice, divorcing spouses in Utah often discover that the judge’s order is not a magic key to compel the mortgage company to cooperate, and the resulting obstacles frequently put both sides in a financial bind.
This is not speculation. The Consumer Financial Protection Bureau (CFPB) recently published a report based on real homeowner complaints showing patterns of mortgage servicers pressuring successors to refinance instead of processing assumptions, delaying paperwork for months or years, refusing to release the original borrower from liability, and even creating risks for survivors of domestic abuse.
You can read the report here:
Why Divorce Orders Do Not Automatically Control Mortgage Servicers
In Utah divorce litigation, the court has broad discretion to divide property equitably and allocate debt under Utah Code § 81-4-406. A decree might award the house to one spouse and order him/her to refinance the mortgage within a set time or indemnify the other spouse for liability on the loan.
A divorce decree, however, is not a contract modification between borrower and lender.
The lien and promissory note are governed by the mortgage contract and federal and investor underwriting rules, not by family court decree. This is why servicers tell successors they must refinance, even when assumptions might be permitted under the underlying loan program.
The CFPB’s report confirms this disconnect. Homeowners report servicers demanding they refinance at current higher rates instead of letting them keep the existing loan terms, pushing successors into costlier debt.
Lessons From the CFPB Report (In Plain Language)
The CFPB grouped complaints into familiar problem themes:
· Homeowners report being pressured to refinance instead of managing the existing loan or being evaluated for assumption, even though federal servicing rules and many programs allow transfer or assumption without changing terms. Refinancing at today’s rates can mean hundreds of dollars more per month than the original mortgage, often at exactly the time the homeowner’s finances are strained.
· Delays of months or years are common, often with repeated requests for the same documents and conflicting servicer instructions. These delays can leave one spouse exposed to a decree’s deadlines while the other waits for servicer action.
· Servicers frequently refuse to release the original borrower from liability, even when the successor spouse has been making payments for years and meets underwriting criteria. The result: one spouse remains on a loan they no longer own, risking credit harm if payments falter.
· Domestic violence survivors report an even harsher reality: servicers continue to send mortgage statements and require consent from an abusive ex-spouse, creating both safety and financial risk.
What Utah Courts Can Do to Enforce Decree Terms
Once a divorce decree is entered, it is a binding court order. Under Utah Rule of Civil Procedure 7B, a spouse can file an ex parte motion to enforce the order and for sanctions, including contempt, if the other spouse fails to comply with a specific term of the decree. Rule 7B is designed for domestic relations matters and sets out procedural requirements including verified affidavits and service.
Here is the key but often misunderstood point: Rule 7B lets you enforce the order between the spouses, not compel the mortgage company to do something it is not legally obligated to do under its contract or federal servicing rules. The court needs to see that the non-complying spouse knew what was required, could comply, and willfully refused to do so, often a high bar when the problem is a third-party servicer, not the ex-spouse. To impose contempt sanctions, the court must find willfulness; mere servicer delays or inability do not necessarily translate into contempt.
Utah courts also have continuing jurisdiction over property and debt allocations under Utah Code § 81-4-406 meaning the court can modify a decree’s terms if circumstances change significantly, such as when refinancing fails due to lender refusal. That said, the court’s power is inherently limited to orders between parties, not instructions to non-parties like banks or servicers.
Practical Advice When Refinancing Is not Automatic
Given the CFPB’s documented servicer behaviors and Utah’s procedural landscape, divorcing spouses should treat refinancing and mortgage assumption not as clerical tasks, but as real financial negotiations with third parties.
At the decree negotiation stage, think about what happens if the lender refuses an assumption or pushes a refinance: build reasonable timelines, fallback plans (like conditional sale triggers), indemnity language, and clear cost-sharing provisions into the settlement agreement itself.
Post-decree, Utah’s Rule 7B process is your tool for *enforcing* the other spouse’s obligations under the decree, not for forcing a mortgage servicer into action. Complaints to the CFPB about servicer behavior can create regulatory pressure and help future homeowners, but they do not change the contract terms between borrower and servicer.
By understanding both the limitations of family court authority over lenders and the real patterns of servicer resistance, both spouses can plan smarter and avoid financial harm long after the decree is signed.
Utah Family Law, LC | divorceutah.com | 801-466-9277