Home Selling in 94928>Question Details

Megan, Home Seller in 94928

How to get OUT of a loan?????

Asked by Megan, 94928 Thu Aug 26, 2010

I bought a house with my boyfriend three years ago for $400,000, no down payment. My name is on the loan and the title. Two years ago we broke up and I moved out of the house and he still lives there paying the mortgage on his own. We are totally upside down in our mortgage with similar houses in the area selling for $250,000 or less. I want to get my name of the loan and title and don't care if we need to get the house sold completely. What is the best solution for both of us?

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4
@DP,

Why would any bank in today's market allow a co-borrower off of a loan? Isn't it better to be able to pursue two debtors than one, in case of default? Especially, on a home with negative equity. Think about it.. .... Happy funding, Rudi
Web Reference: http://www.umboc.com
0 votes Thank Flag Link Sat Aug 28, 2010
You need to get him to assume the loan, and have your lender to do a novation.
0 votes Thank Flag Link Sat Aug 28, 2010
As unfortunate as it may seem your situation is not in the least uncommon for this day and age. Many home buyers have been and still are going to be going through the same scenario. My first piece of advice, one I think by reading your question you already are doing, is to be extremely realistic. Assuming that you still owe a very large amount on that $400,000 note and comparables are selling for almost half of that amount, you may be a perfect candidate for a loan modification or a short sale. Many banks are starting to get realistic themselves in trying to help home owners keep their homes in times of duress and more modifications are being approved all the time. More short sales are closing escrow as well.

When we do short sale listings in my office, we do a complete financial analysis on our clients to see if they would be a better fit for a modification or a short sale, not to mention our clients wants and needs in regards to their home ownership future. Bottom line, I would decide in all certainty which route you want to take; 1.) Modification - keep the home and hopefully lower payments and loan balance or 2.) Short sale - Sell the home and be free of the debt with a large (but not HUGE) hit to your credit. If you've been thinking about a short sale, just know that they can be a little complicated and potentially time consuming. There needs to be extenuating circumstances for a bank to approve the sale. These can be things like losing a job, less income, major medical issues, etc. Just not wanting to pay is typically not a good enough reason.

Hope that helps, feel free to let me know if you have any more questions. And good luck! There are ways out of your situation!
0 votes Thank Flag Link Sat Aug 28, 2010
You both agreed to purchase the home together. Apparently, you did not make a legal document for what would occur in your situation. He must agree with you or IMHO you have no legal avenue.

If both of wish to spend $125,000 each to satisfy your needs, good luck. Or, maybe, both of you would rather go into foreclosure and then file Bk's. You have options. Again, IMHO, I would leave matters, as is.
Web Reference: http://www.umboc.com
0 votes Thank Flag Link Thu Aug 26, 2010
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