This seems to be a question for your attorney for what exactly you should do. I am not an attorney, so any suggestions here should not be construed as legal advise.
For the real estate aspect, there are several avenues of what could be done. Each one will need differant courses of action.
You could "buy" the portion of the home owed to him and get a quit claim deed. This is the easiest, yet for obvious reasons, most costly. You would need to get the home appraised for the proper portions to be divided.
You could put the home up for sale and divide any proceeds or, if money is still owed, any payments to be made. The problem with this, is that there would be conflicts from one owner to the other on what the listing price should be and what would be accepted in any offers. This could get dragged out unless provisions are made to list it at the average price of several market analysis reports and that the home will be sold if offers are within x% of the listing price.
Unfortunately, there is not easy out if either or both parties are bitter in the process. As for him being on the loan? Talk to the lender to see what you could do.