Financing in Truckee>Question Details

Chris, Home Owner in Truckee, CA

I am current on my payments but approx. 80-100k upside down. I have gone through a divorce and have a court order to get ex off the loan. any ideas?

Asked by Chris, Truckee, CA Wed Dec 28, 2011

Current on all payments, taxes, etc. Credit score in low 700s depending on which one is run. Don't anticipate problem with qualifying. But how do you refi a property with neg-equity?

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Chris,

That's a bummer on HARP. The good news is that Beneficial is pretty flexible with modifying their notes. Call them, explain your situation to them and tell them that you want to get her off the mortgage using qualified assumption. You'll have to provide your credit and financials and essentially re-qualify for the loan that you already have but I'd be surprised if they didn't do it. It would likely cost a heck of a lot less than a refinance too.

Regards,

Charles Dailey - NMLS ID 79048
iLoan - NMLS ID 4474
charles@charlesdailey.com
0 votes Thank Flag Link Wed Dec 28, 2011
Charles:
Thanks for that website. Unfortunately the loan is with Beneficial who is both not a HARP eligible lender nor for whatever reason are they willing to do the loan assumption. Apparently, Beneficial isn't in the loan businesses anymore and is just servicing their current portfolio of loans.
0 votes Thank Flag Link Wed Dec 28, 2011
Chris,

You are correct about the impact on her credit were you to do a short refi. If you want to stay in the home, you should call your loan servicer and ask them if they'd allow qualified assumption where you'd qualify for the loan yourself and she'd get dropped from the note. You'd do this if you currently like the terms of your loan. If you want to improve the terms of your loan, you should consider a HARP loan as Dot Chance mentioned (only it allows for your the percentage of your home being financed to be in excess of 125% now - see weblink below).

Regards,

Charles Dailey - NMLS ID 79048
iLoan - NMLS ID 4474
charles@charlesdailey.com
0 votes Thank Flag Link Wed Dec 28, 2011
Chris,

There is a program that may be able to help. It is called HARP and it allows you to to refinance 125% of your home value. If you would like to keep your home this may be your answer, I will be happy to refer you to a lender that can help you.

Another alternative is to short sale your home. I can talk to you about that and discuss your options with you. Just contact me directly to discuss your options.

All my best,
Dot Chance, Realtor®
Certified Distressed Property Expert – CDPE®
DRE License #01494182
Keller Williams Realty World Media Center
http://www.DotChance.com
818.339.7712

WHEN YOU THINK OF REAL ESTATE...Think DotChance.com! My business thrives from your referrals!
0 votes Thank Flag Link Wed Dec 28, 2011
Yes. I am hoping to continue living here. The ironic thing is that my ex wants her name off the loan to help her debt ration and credit score. It seems doing the short refi will only wreck her credit score. Is that a correct assumption?
0 votes Thank Flag Link Wed Dec 28, 2011
Refinancing or a loan modification might only lower your payments a marginal amount if you qualify. Very few people actually qualify for a refi or loan modification, especially if there is no equity in your home. You sound like a prime candidate for a short sale. I'd recommend you seek out an experienced short sale realtor, and get legal advice from a lawyer who specializes in divorce and/or short sales (the usually offer a free 1st consultation). Usually the bank will not negotiate with you while you are still current on your payments. I hope this is helpful, and I'd be more than happy to refer you to a good agent in your area.
0 votes Thank Flag Link Wed Dec 28, 2011
Chris, do you want to live in this house? Because it will be very difficult to refinance if you are upside down. If you want to sell, then you can talk to your bank about a short sale, but they may try to go after you for a deficiency judgement to pay the difference between the loan and the sale price.
0 votes Thank Flag Link Wed Dec 28, 2011
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