I did a search and did not see this topic covered. Sorry if its a duplicate.
I am assisting a family member with a loan process. I am fairly financially savy, but this is out of my realm.
Due to divorce, the current family home is at present in both names as is the mortgage. Due to divorce decree, exwife is required to get house and mortgage out of exhusbands name, so a refinance is only option it would appear. Since her only current income at the present is maintainence support, which will drop significantly in 6 months, she would not quailfy for a conventional mortgage. She is looking for work, but not having success as of yet.
She is only concerend with the legal requirements, not whether the financial details and this concerns me. She is not financially savy at all and this is hindering my ability to help.
I am not familiar with this loan product/product/process so I dont know how to advise her. Anything I should look out for/keep in mind as I try to assist her.
Any website I could be directed to that would give impartial info on this topic? My initial google search came up with only lender sites.
Thanks for any direction,
Sue Update, excellent credit, loan amt-$225,000, apraisal about $400,000, rate is 6.75 with a prepayment penalty.
ThursdaysChild said: Try the mortgage forum at creditboards.com. If you can't find the topic there, register and post it. The mortgage pros there are very responsive.so are mortgage brokers allowed to solicit business openly there or do they have to pay a fee?
ThursdaysChild
Missed.
posted: Nov. 13, 2007 @ 7:26p
SUCKISSTAPLES said: ThursdaysChild said: Try the mortgage forum at creditboards.com. If you can't find the topic there, register and post it. The mortgage pros there are very responsive.so are mortgage brokers allowed to solicit business openly there or do they have to pay a fee?They are not supposed to solicit business. They are allowed to include their contact information in their posts so you can contact them if you wish. I don't know whether they pay fees.
My point is the same as those who say "don't ask your legal questions here - go to a legal web site" or "go to creditboards with your credit questions." And don't worry, SIS, just like FW there are plenty of non-brokers/LOs in the mortgage forum who jump in and give advice.
There are a ton of blanks that need to be filled before I could give you a better answer.
1. Her credit score 2. Mortgage loan amount
Get ready to pay a higher than normal interest rate...If she had docs I would say FHA, mmm I hope all the other debts (CC's, revolving payments ie car loans) are up to par.
jamesboy
Senior Member
posted: Nov. 14, 2007 @ 8:03a
My understanding is that the alternative documentation market is completely gone. Even the low down payment options are few, especially in the jumbo market. Hefty down payments and full documentation are the norm again.
SUCKISSTAPLES said: ThursdaysChild said: Try the mortgage forum at creditboards.com. If you can't find the topic there, register and post it. The mortgage pros there are very responsive.so are mortgage brokers allowed to solicit business openly there or do they have to pay a fee?
they used to openly solicit business there, but now it's on a wink wink basis
but those guys are slime and will put you into a monopoly money loan just for the commission. but they have been complaining there lately in their own mortgage broker forum that the only subprime left is FHA
teplitsa said: SUCKISSTAPLES said: ThursdaysChild said: Try the mortgage forum at creditboards.com. If you can't find the topic there, register and post it. The mortgage pros there are very responsive.so are mortgage brokers allowed to solicit business openly there or do they have to pay a fee?
they used to openly solicit business there, but now it's on a wink wink basis
but those guys are slime and will put you into a monopoly money loan just for the commission. but they have been complaining there lately in their own mortgage broker forum that the only subprime left is FHAyeah i figured that mortgage brokers who would hang out at a place like creditboards must be slime
HawkySue
New Member
posted: Nov. 14, 2007 @ 8:25a
Some of the details as I understand it.
Her credit is excellent, the highest tier. I dont have an exact number, but she has never been late with a payment.
Loan amount would be in the $225,000 range and house is appraising around $400,000, since there is so much equity, little risk to lender.
I think the rate is 6.75% but its interst only and a prepayment penalty if refi in 3 years. I dont like it and was wondering what other options she might have, if any.
I've been in the business for a number of years and 6.75 for a NO Doc right now is pretty damn good. No Doc is the only way from what you have described that she can go on this. The only bummer is that once she gets a steady job she is locked into that loan for 3 years unless she wants a prepay.
As for the legal requirements there isn't anything that is really required of her. No doc is just that - No proof of job, income or assets. There is also no requirement that she has any of these items. It is strictly a credit score driven program (assuming collateral (the house) is ok).
Unless she is using authorized accounts to boost her credit score for this loan, there is little legal recourse the bank/lender can take against her in the event of default.
OP, seems to me you are getting ahead of yourself. Can your friend make the monthly payments on this house, including taxes and maintenance ?
HawkySue
New Member
posted: Nov. 14, 2007 @ 11:31a
She has.
She needs to have the current loan out of the name of former husband. I think it needs to be done soon, maybe this month. Otherwise she would not be doing this. There would be no point. She is loosing a better interest rate/terms then she has now.
If she fins employment fairly soon it will hopefully recoop the drop in income. She also has the option of taking on a roommate. She can also decide to sell next spring/summer/fall.
Like I have said, I am not familiar with anything other than a full disclosure loan. Just trying to make the best financial guidance for her so she can provide a stable home for her children.
The bottom line here I think is that she is in a house she cannot afford. She has to start making plans to downsize. IF her income improves in the future, great. But making plans based on it happening, particularly since her job hunting thus far has not been successful, strikes me as a poor decision.
Now, if she is just trying to avoid being in the position of the 'motivated seller', I suggest looking into HELOC rather than conventional refi loans -- no doc or doc. Although they carry higher rates of around 8%, they are free to get, are still available in today's loan market, and can be offset with 0% apr credit cards, leading to less interest overall, and a smaller monthly payment. This will give her flexibility to either sell at market price, or get a job and perhaps stay in the house by re-fi into a conforming loan with documentation. Check with the lender who holds the current mortgage first.
This scenario happened to me, although the circumstances were different: My sister and I were left as co-owners of my mother's home when she died. Money was needed to fix the place up for sale, but I was not willing to front it, and my sister did not have the money. She ended up taking out a HELOC in her name that paid off the 1st mortgage, and gave her a credit line that she spent fixing up the house. At the time she said her credit was 'not great', and she was unemployed. I had to rescind my interest in the home, as will your friend's husband.
HawkySue
New Member
posted: Nov. 14, 2007 @ 5:31p
No one in the family thinks she can afford the home.
She is being dragged into court because she does not have the mortgage out of his name. This is only to satisfy a legal requirement.
I just want her to be able to live with the terms of this loan for the next year or so, while she figures out what her future plans are with regards to the house.
Thanks for the idea about the HELOC. Had not thought of that as an option.
as Ive said in other threads, usually a divorce decree will allow the party paying the mortgage to keep the loan if they cant refi, and indemnify the other party. Did her attorney not recomment this provision?
This "we must refi" BS is very problematic especially in todays lending climate.
Please clarify SiS. The mortgage payer has to indemnify in order to keep the original loan, or inability to indemnify is one of the qualifications ?
Actually, I'm surprised this is possible. Why doesn't the lender have the right to call in the note ?as Ive said in other threads, usually a divorce decree will allow the party paying the mortgage to keep the loan if they cant refi, and indemnify the other party.
Eric- If the person keeping the home is unable to refi, the parties can agree the spouse keeping the home must agree to indemnify the other spouse from all house related obligations. Nothing changes about the loan itself. The lender has no say in the matter (this is an agreement between the parties). The lender can still go after all borrowers if payments stop. For obvious reasons, this isnt a choice people favor (as their credit stays on the line for late payments, defaults etc), but it avoids this "I must refi at any rate" situation.
Its no different than if you and I were business partners in a home, we are both on the loan, an I am going to live there. We draft an agreement saying I will pay all the home expenses and I will indemnify you for all property expenses and obligations. The lender has no say about our agreement, its a private agreement we've made.
EricGo07 said: This scenario happened to me, although the circumstances were different: My sister and I were left as co-owners of my mother's home when she died. Money was needed to fix the place up for sale, but I was not willing to front it, and my sister did not have the money. She ended up taking out a HELOC in her name that paid off the 1st mortgage, and gave her a credit line that she spent fixing up the house. At the time she said her credit was 'not great', and she was unemployed. I had to rescind my interest in the home, as will your friend's husband.You should have found a better lender. Ive arranged for many HELOCS where multiple parties are on title, but only one is a borrower.
Tons of lenders will do this, no problem. Chase, National City, Charter One, Deepgreen, etc.
Due to divorce, the current family home is at present in both names as is the mortgage. Due to divorce decree, exwife is required to get house and mortgage out of exhusbands na
Update, excellent credit, loan amt-$225,000, apraisal about $400,000, rate is 6.75 with a prepayment penalty.
Does she get to keep all that equity? With such a low LTV, she will have no problem getting a nodoc loan.
if she does need to refi, hat she chould do is get a loan for 20-30k more than she needs. And keep that money dedicated to make the mortgage payments for the next couple years while she gets on her feet.
SUCKISSTAPLES said: EricGo07 said: This scenario happened to me, although the circumstances were different: My sister and I were left as co-owners of my mother's home when she died. Money was needed to fix the place up for sale, but I was not willing to front it, and my sister did not have the money. She ended up taking out a HELOC in her name that paid off the 1st mortgage, and gave her a credit line that she spent fixing up the house. At the time she said her credit was 'not great', and she was unemployed. I had to rescind my interest in the home, as will your friend's husband.You should have found a better lender. Ive arranged for many HELOCS where multiple parties are on title, but only one is a borrower.
Tons of lenders will do this, no problem. Chase, National City, Charter One, Deepgreen, etc.Thanks for the education SiS. This is the sort of information that comes in *real* handy when it is needed, but is damn near impossible to ferret out in real time.
FWIW though, I sent my sister to all the usual suspects that we know and love here on Fwf, including USAA and PenFed. She was rebuffed by all except the local lender she carried her own mortgage with. And this was a couple of years ago, when credit was offered to dogs, so long as they had tags. But then again, I don't know what her exact credit score was, and she is not a reliable historian. It's too bad I signed off the house -- the profits were supposed to be split amongst our poorer siblings, but my sister took advantage of the situation and reneged on her promise.
Next time you run into a situation about a specific lending need, post a question thread here in this forum, happy to share info. After all, everyone else does
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