It is very common in divorce settlements for one person to keep the house or to reside in the house after divorce. The provision may be for the waiver of an interest in the spouse's retirement accounts or perhaps a waiver of an interest in other financial accounts. Sometimes the resolution may provide for no transfer of title and instead the parent with primary residential custody of the children may be permitted to stay in the house for an extended period of time. Both situations have a certain amount of financial risk to the person not living in the house unless protective provisions are in the settlement agreement.
Do not be fooled that if you "take your name off the deed" that you are also off the mortgage. The bank has the right to state that both spouses signed and promised to pay the mortgage and that has nothing to do with which person is in title on the deed. So if the residential spouse does not make the monthly payments the bank can expect you to pay and can negatively report non or late payment to credit agencies.
So if you will no longer own the house it is very important to make sure that the spouse who now is the sole owner of the house refinances the mortgage so that you are no longer on the old mortgage which has now been paid and a new mortgage without your name has been obtained (which may even be with a different lender). If you fail to have proof that you are off the mortgage you must assume that you are still on the mortgage and you can be liable for the monies owed even though your divorce agreement provides otherwise. The best proof that you are off the mortgage is to receive a "Satisfaction Of Mortgage". Otherwise, be aware that the lender has not signed your divorce agreement and they have their rights under the Note that was signed with the Mortgage by both spouses.
I typically will advise clients not to transfer their ownership of the house until there is a refinancing, in case it becomes necessary to go to court and compel the sale of the house due to the failure of other person to refinance. (This could be a separate blog in itself.)
If instead of a transfer one person will stay in the house with the children for an extended period of time and both persons remain on the mortgage it is important to have a provision that can accelerate the sale of the house if the person in residence does not pay the mortgage. The problem arises when the parent in the house repeatedly pays late or misses payments causing damage to the other person's credit (even if the payments are later made). If the residential parent lets the house go into foreclosure they are basically living rent free and if there is little equity in the home exposing the other parent to a "deficiency judgment" (monies owed after foreclosure to the lender).
To help manage the above problem I will negotiate a provision that states if two or more mortgage payments are not made or paid late within a 12 month period then the other parent can declare a default and seek to end the period of exclusive occupancy and demand the listing and sale of the house. This type of litigation is always more complicated then it may seem as often the emotional impact is very high on both parents and the courts are often trying to find a compromise so that the family home is not sold.
The key to all of these situations is to have experienced matrimonial counsel so that the rights of both parties are protected. There are many ways that the failure to have clear provisions, proper notice and real consequences may divert the expected outcome. These are not provisions to be written up at the kitchen table or downloaded off an internet form which does not address the particular needs of each person.