After a divorce, Ican't get my name off a home equity loan. My ex has the house, and is paying and living there. Is there anything i can do?

Asked by Kay, Fenton, MI Wed Jan 11, 2012

in 1996 my ex and I got a home equity loan in which we both signed on for the value of the house. After our divorce, the judgment deemd me free and clear of all debt, and contracts related to the residence. However the bank will not release me from the loan, and refuses to refinance him because the home is not worth what is owed. He is living there and making the payments. I have great credit and make good money, but nobody will work with me to get a home. Does this mean I can't buy a house ever agin? Do I have any options? This is very frustrating, I just want to buy my own house and start my life over!!!

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Maria Gilda Racelis’ answer
Maria Gilda…, Agent, Manchester, CT
Wed Jan 11, 2012
Hi Kay,

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.

Maria
0 votes
Russ Ravary, Agent, Commerce Township, MI
Sun Mar 10, 2013
You will be able to buy a house, so long as you show your divorce decree showing that you have no responsibilty for the debt. Your new mortgage company will accept that
0 votes
Rnl, Home Seller, 48451
Thu Aug 23, 2012
Well applied for a mortgage several times since I posted this. Both times turned down because this is on my credit report. I give up.
0 votes
Eric Veronica, , 43620
Thu Jan 12, 2012
Hello Kay,

A divorce decree and proof of a quit claim deed will take care of this issue. Call me if you would like to discuss in detail.
0 votes
Kay, , Fenton, MI
Thu Jan 12, 2012
Yes, gthey are denying me for approval due to the equity loan on my credit report. Chase wont let him refinance becuase the equity loan is more than what the house is worth. I feel like I'm being held captive.
0 votes
Eric Veronica, , 43620
Wed Jan 11, 2012
Kay,

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
0 votes
Karen Paytas, Agent, Clinton Twp, MI
Wed Jan 11, 2012
Hi Kay!!

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.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
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