Advise on refinancing and getting ex wife off mortgage.

Asked by Tc, Omaha, NE Mon Mar 2, 2009

I'm divorced 2 years and have been living in and paying the mortgage for 2 1/2 years now. Here is my problem. Prior to getting a divorce, we filed for Chap. 13 (which was discharged in Nov 08) Now I have to refinance, but because of the housing market, the loan to value ratio is such that i can't do this without a big closing cost. If I try to sell, I doubt i would be able to sell without losing money. She signed the quitclaim deed with the divorce, now all I want is to get her off the mortgage. And it seems that is going to be impossible dispite living there and paying the mortgage on my own for 2 1/2 years. Any ideas?

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Gregorio Den…, , San Diego, CA
Sun Jul 15, 2012
You need to check to see who owns your mortgage. If it's owned by Fannie Mae or Freddie Mac you may qualify for a HARP refinance. These refinances allow you to refi an underwater property and they do allow you to remove a co-borrower's name as long as you can prove you have been making the payments on your own for the last 12 months. Visit http://HarpSupport.Com for eligibility requirements and links to Fannie and Freddie to check to see if they own your mortgage.
Web Reference:  http://HarpSupport.Com
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Marilyn Edwa…, Home Buyer, 68933
Sun Jul 15, 2012
I ran into the same problem when my ex and I divorced. His name is on the mortgage application, but he signed a quitclaim on the house. The bank will take his name off the mortgage application if I pay them $100. I'm not willing to do that. Whenever the bank sends me a check with both our names on it, I sign my name and then his, followed by my name. I then cash the check. My banker tells me it's legal to do this. I don't dare send anything negotiable to my ex -- he'll lose it.

If I wanted to get nasty, I could insist that ex make payments on the house. However, he has no money, and is living in an assisted living facility in another state.
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Other/Just L…, , Fleming Fitch Grant, Holly Hill, FL
Tue Mar 3, 2009
Lending answer:

Regarding your ex-wife's purchase: If your ex-wife has difficulty in qualifying due to the old joint mortgage payment on your home, her lender should be able to remove that obligation from her debt ratio with a copy of the divorce decree, marital separation agreement, and copies of the 12 most recent checks showing you have been making the paymnts from your own account.

Regarding refinancing your mortgage: You might gave success with your servicer by requesting a short payoff. A opy of the divorce decree, marital separation agreement, loan commitment from the new lender, and proof of inadequete funds to close (short $3500) might do the trick.
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Dean Uhing, Agent, Omaha, NE
Mon Mar 2, 2009
Do you know anyone (investor) who could buy your house so you could pay off the loan? This would be a special type of sale in which the investor agrees to rent the house back to you and giving you an option to buy the house back, say in two years. Be sure to have a good real estate attorney draw up this type of contract.
This will give an investor two years of good cash flow with a good renter. It allows you to get everyone's name off the mortgage. It gives you time to get your financial situation in order. And hopefully, it will save you lots of money in closing costs. Just a thought. I believe there is an answer out there for you.
Sorry for the tough emotional times you are going through.
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Tc, , Omaha, NE
Mon Mar 2, 2009

Thanks for your answer, yes it is in the decrees and i got it extended til June 1st. I can qualify for a loan, but the Loan to Value is going to make it impossible for me to refinance. Even if i get a 97% I still need to come up with approx 3500 or more and after paying out on the BR for 2 years while I was paying the mortgage by myself, extra funds are non existent. She also, is looking to buy a place, but is not able to until she is off the mortgage. If I can't refinance by June 1, i have to put the house up for sale. This is a place where both kids have lived since they were born and we have joint custody so I would like to keep them in their house.
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Dean Uhing, Agent, Omaha, NE
Mon Mar 2, 2009
I understand your question being in a similar situation. The mortgage is a contractual agreement between the borrowers (you and your ex wife) and the bank. There really is no reason for the bank to take your ex wife's name off the mortgage; as this makes one other person liable for payment of the debt. You would have to pay off this loan either by cash or refinance. Check with your lender or attorney if there are any other possibilities.
I'm curious what difference does it make to you that your ex wife still appears on the mortgage? She quitclaimed the property to you so she no longer has any title to the property yet she continues to bear an obligation to pay off the debt. She should be the one to be asking this question.
Or were you ordered by the court to pay off the mortgage? Is this why you said you "have to finance"? If this is a divorce decree situation, it is best to visit with your attorney who handled your divorce.
If there is no legal responsibility to refinance or pay off the loan, why not just leave things the way they are and keeping making your loan payments.
Also check with your tax consultant to make sure you have the benefit of deducting taxes and interest. I would think you would since the title is in your name and your mortgage is recorded.
Good luck.
Dean Uhing
Prudential Ambassador Real Estate
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