Have you actually tried to get pre-approved for a mortgage? If you have, then are you being declined becuase of high debt to income ratios?
Having an equity line on your credit report is not a valid reason to be declined for a mortgage. In fact ,if you can prove that your ex husband has made the last 12 equity line payments on time then the monthly payment can be removed from your debt to income ratio.
Call me if you have any quesitons
If you can't qualify for a new home with the equity loan debt as part of your debt to income ratio I'm afraid you're going to have a difficult time getting a new mortgage. Lenders are playing tough with releasing any party from the debts. Has your ex tried to modify the current loan on the house since it's under water? I would recommend you talk to your attorney and see if he can give you any advice.
Karen Paytas, GRI, CMS
Real Living Kee Realty
The home equity loan is signed by you and your ex. The options are: To pay off the existing loan or to have your ex refinance the mortgage but the amount the of new mortgage should be enough to settle the home equity loan under the ex's name only. The house should be appraised at the amount to cover the home equity loan.
Please consult a legal and mortgage expert.