John Flores, Home Buyer in West Covina, CA

we are making a 5,000 dollar a month payment on a house that is worth 350,000 (loan is 460,000)

Asked by John Flores, West Covina, CA Wed Dec 31, 2008

If we loose the house can we buy another one only under One spouse name. the present house is only under my wifes name not mine it does not apperar on my credit and I make 120,000 a year

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Answers

8
John-

It appears that you should be able to afford the new home payment on your own since your wife must have qualified on her own when you bought your current home. The one piece of information that you would need to properly disclose is the state of your current home when you apply. You need to indicate either "Own, Rent or Living Rent Free." If you are on title to your home then you own it, whether or not it is on your credit. If you are on title and you state that you rent or live rent free then technically you are lying on the application and commiting fraud - probably don't want to do that.

If your combined incomes can support both payments then my suggestion would be to simply disclose your ownership status in the current home and indicate that it is either to be sold or converted to an additional property. Your equity stake in the property is irrelevant if you can afford both payments.

Please feel free to call me if you would like to go over the application process or if you have any questions.

Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com
1 vote Thank Flag Link Wed Dec 31, 2008
It's extortion. The hair stands up on the back of my neck when I read posts like yours. You are a hard working homeowner making a phenomenal mortgage payment to a lender that not only happily accepts it but probably doesn't even own your mortgage note any longer.

You have a way out with what you explained in your question. And, as long as a credible lender does not see a snag in the fact that one spouse's creditworthiness won't impact the other, MOVE!! You may need to purchase the property in your name as sold and separate property with your spouse signing off to any right of the home through a quit claim deed. But that answer is really meant for the individual specializing with financing and title issues.

Without telling you what to do I would like to offer what I would most likely do in your situation. I would cease any further payments on this loan as it is obviously over inflated and robbing me (you) of money I could be putting towards my children and future. No one knows when the market will rebound to a point where there will be equity in the home once again. You should not pay more than 32% of your total income towards your mortgage payment, MAX and 32% is considered too high for today's standards.

I would contact my lender and lay it all out on the line. I would tell them that it is obvious a $5,000 mortgage payment on a $350,000 valued home is ridiculous. I would ask if I could purchase the home at market value from them. If not, then it's certain that the home will end up in foreclosure and another bank owned home will be added to your books. They have to see how one sided the situation is and I assume they were expecting this sooner or later anyhow.

Ask them what their loan modification terms are. What options are available? Put the ball in their court as much as possible. If communication fails then there is not other choice than to move. And while I have a good credit standing (as you do now) I would start that house hunting asap. Go ahead and attempt to short sell the home for the bank in the meanwhile. A short sale may look a tad bit better than a foreclosure on your record. Ask the bank if they will accept a deed in lieu of foreclosure meaning that you would be simply giving the home back to the bank and walk away.

With any of these options you will still need to move and why put it off any longer. You are lucky. You have options and choices that most Americans don't have. You are on the right track. Best of luck to you and make it a year worth looking back on!!

Diane Wheatley, Broker
diane@moveupproperties.com
(909) 981-5589
0 votes Thank Flag Link Sat Jan 3, 2009
John,

You are in the same boat as many homeowners are right now. I would call your current lender and ask to speak with the work out department and tell them about your situation. Many lenders are doing that instead of a short sale right now. You must qualify for a short sale and there are many reasons why a home would be considered by the bank for a short sale. You can contact me for further information regarding that or any other questions you may have.
If the house is under your wife's name, then her credit can be ruined. FICO scores get hit about 80-160 points for a short sale versus a foreclosure which is much higher.
You could purchase a home on your own without her on the loan and add her in after the loan records with a grant deed. You can ask your escrow officer to do that. I used to be a title officer so I know some of the things you can do to make it work.
Let me know if I can be of any more assistance.

Good luck and Happy New Year!

Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
951-204-1864
0 votes Thank Flag Link Wed Dec 31, 2008
Talk to your bank to see if they will adjust the payment and seek advice from other loan officers.

TA
0 votes Thank Flag Link Wed Dec 31, 2008
John:

This is the situation of many home owners. There is a lot more to the puzzle than just the information that you have provided. As the other agents have indicated you will need to talk to a lender to find out what your options are regarding purchasing another home Your credit scores, debt ration and down payment will all play into the mix. As indicated by one of the answers whom ever is on the loan now might want to speak to the lender and see if they can renegotiate the loan. The web site to understand what might be available to you is The Hope for Homeowners program.

http://portal.hud.gov/portal/page?_pageid=73,7601299&_da…

If that doesn't work and you cannot afford the payments then you next option might be a short sale, I can explain how that works if you like.

Diana 909-945-5763
Web Reference: http://www.DianaM.com
0 votes Thank Flag Link Wed Dec 31, 2008
Are you saying you are going to lose that home. You will owe the bank money, and you want to buy another home?
0 votes Thank Flag Link Wed Dec 31, 2008
Speak to a mortgage broker determine what is your best interest present all your financial records, employment history, and etc.

Have you thought about contacting lender for short sale therefore if home goes into foreclosure negative impact on her scores, vs. a short sale.

If you determine to give up on home best possible find out all your options prior to letting your home go, if not you might just ended up as renters vs. home owners.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Wed Dec 31, 2008
John: Your best bet is to talk to a loan officer. I believe that you are in a good position since you are not on title on your present home and you make a good income. Probably you can buy the new home with only your name on title as " John Flores, a married man, as his sole and separate property".

My advice, check with a loan officer to see if this is possible in today's hard mortgage market. Good luck.
0 votes Thank Flag Link Wed Dec 31, 2008
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