Yes, but it makes it more difficult.  It often requires a new signature for the spouse who is no longer living in the home.  In a separation or divorce, the income that previously separated one household must often be used to support two. As separated or divorced spouses struggle to create a budget and make ends meet, they often find themselves facing foreclosure. When they do mortgage modification can be an option. Divorce is a stated grounds for establishing hardship under most private and government modification guidelines.

  • Although separation or divorce is considered a viable hardship for purposes of mortgage modification, the crucial element to success is presenting a plan that shows that separation or divorce is a temporary hardship that can be overcome.
  • Co-borrowers with separate households need to be extremely well-prepared in proposing budgets that are accurate and encouraging to lenders under a request for modification. It requires a well-planned, coordinated effort from both co-borrowers.