Can I Modify my Ex-Husband's Loan?

[allymay]

So I am in the reverse situation from some of the posts that I have read.
My ex-husband and I divorced (obviously) and while the loan/mortgage is in his name, I got a Quit Claim Deed and in the Final Decree the house was left to me. I have been making all of the payments, life is good! Then, my ex defaulted on an external loan (maybe a tax lien) and so the mortgage company paid the external loan company and then put it into an escrow shortage which doubled my payments for the next 12 months.

I didn't realize this until I was 1 month behind (because I paid the original mortgage payment) so in an attempt to do damage control, I contacted the escrow department for an extension of the escrow account. They said because I was in default, they couldn't extend it!!!

So, now I am considering trying to get a loan mod on a house where the mortgage isn't even in my name.

Is this possible?

[LoanModHelpCenter.com]

Welcome to the forum!

Yes you can modify that loan. It may not be the easiest thing to get down though. Keep in mind that even after the modification the loan will still be in your ex-husbands name only. As modifications are not like a refinance. It is simply taking the existing loan and changing its structure based on your current financial position. You could try an assumption of mortgage but there may still be some liability for him even after. There servicer would have to fully agree with the assumption and release him of the liability. Which is possible but again may not be the easiest thing to get down.

If you don't care about who is on the loan and then you can simply approach the modification. You would need a signed TPA from your ex and then the decree that the property is now yours so that they do not look at his financial situation in qualifying, they only look at yours.

Go through some of the qualifying factors and let me know if you want me to give you my opinion on if it would make sense. This is a possible modification but again, I think you have your work cut out for you on the road ahead. Good thing you found this forum!!

:-)

[allymay]

I am so sorry, what is a TPA? And I honestly don't mind it being in his name so I am comfortable with a mod. Thank you for the feedback!

[LoanModHelpCenter.com]

Ohh sorry. The TPA is a third party authorization that he signs with your name on it so that you can call in on the loan and speak on matters of the loan on his behalf. You may already have been an authorized party but if not a TPA will allow that.

Yes it is possible for you. The numbers will have to work and you will have to prove eligibility still. The verification of income is where you will have your biggest issue because they will be trying to use you ex's income since he is on the loan. That is where your decree will come in handy.

No doubt this may be difficult. Lets check the numbers for you.

LB?
Past Due?
Payment (w/o Taxes and ins.)?
Taxes?
Ins.?
HOA?
Est. Value?
Gross Income?

[kymtran]

Just happened to run across this forum....My problem is very similar...My ex and I divorced shortly after building a new house..the decree gave me the house but my husband is the only one on the loan...I struggle to make the payments but managed to keep it together for the last four years...in all those years the mortgage interest deduction (approx. $15,000.00) has been going to waste as it is only in his name. Last year I began missing payments due to a poor economy and lack of jobs in the area. Also my payments had double due to escrow issues dealing with taxes and insurance. I wrote a letter to the bank to get help and requested a modification only to find out I had no authority whatsoever and couldn't even discuss the problem without the approval of my ex....
To make a long story short ..I hired an attorney ($3000.00) and got permission to Discuss the loan but still couldn't get the modification. I am now about three payments behind and sputtering...I don't know what to do except sell the house and pay off the loan before they take it....I don't want to lose the equity I've been building (approx. $100k) My ex won't budge, even though Its going to have a severe negative effect on his credit! I am at my wits end...I can make the payments if only the Bank will modify the loan...and now hopefully cure the default..somehow??

[LoanModHelpCenter.com]

Just happened to run across this forum....My problem is very similar...My ex and I divorced shortly after building a new house..the decree gave me the house but my husband is the only one on the loan...I struggle to make the payments but managed to keep it together for the last four years...in all those years the mortgage interest deduction (approx. $15,000.00) has been going to waste as it is only in his name. Last year I began missing payments due to a poor economy and lack of jobs in the area. Also my payments had double due to escrow issues dealing with taxes and insurance. I wrote a letter to the bank to get help and requested a modification only to find out I had no authority whatsoever and couldn't even discuss the problem without the approval of my ex....
To make a long story short ..I hired an attorney ($3000.00) and got permission to Discuss the loan but still couldn't get the modification. I am now about three payments behind and sputtering...I don't know what to do except sell the house and pay off the loan before they take it....I don't want to lose the equity I've been building (approx. $100k) My ex won't budge, even though Its going to have a severe negative effect on his credit! I am at my wits end...I can make the payments if only the Bank will modify the loan...and now hopefully cure the default..somehow??

Thank you for your post Kym and welcome to the forum!

This is a difficult situation indeed. There are several reasons that you are and will run into trouble.

The first is that because the loan is not in your name, it will make it difficult for the modification to occur under your documentation, VOI, and qualifying factors. This means that your ex would have to be the one to approach the modification for any real traction to actually occur. You could try to assume the loan as stated above, but that will not necessarily happen over night and even after you may run into issues with the mod.
Secondly, the home has equity from your estimation. This is an issue because modification typically requires the home to be negative in its evaluation as that would make it more beneficial for the investor to modify. As it stands with an estimated 100k equity, the lender would more likely rather foreclose than help you.

From your description and what you stated in your post, your best option may be to look into selling the property. If you think that there is equity and you can get out of it with some cash in hand, that is a good avenue to look into. The last thing you want to do is continue to sink more time, money, and heartache into a situation [modification] that may never play out altogether.

I can not tell you exactly what the best path would be w/o going over all of the details, but from what you explained in your post, I feel that may be a viable option for you.

Let us know what happens. Good Luck!

[msmaarcelin]

I am going through the same thing. I got the house (quitclaim) to me in the divorce but the loan is in the ex's name.
The decree gives me exlusive rights and use but holds him harmless of any debt. It does not say that I have to refi.
I started the modification process prior to the divorce being final and was told that I meet criteria and they would review my financials to qualify with ex's cooperation. I just found out on 8-1-12 that it was denied, ( DOJ). I was stunned and questioned why. They said that I am not on the note and they had to use my ex's income ( which is insufficient). They didn't even consider my income because it's not his primary residence. It is however mine. All my wages go to supporting the household.
Meanwhile I'm almost 2 yrs in arears and the bank (B of A) won't reconsider and say I can't appeal. They keep saying that it is non owner occupied, therefore is rental. Non owner income can only be considered if its the borrower's primary residence. But the catch 22 is that he owns the debt but I own the deed. I want to keep my house, I live there with my children. Bank also said that my ex basically forfeited any right to a modification by quit claiming the deed to me.
Anyone have any thoughts or suggestions??
FrustratedinFlorida

[JustSharon]

Well, this may not help now, but I'm very curious to know how your divorce lawyer saw this working out. You could contact your lawyer and ask him, but I doubt he'll have any kind of answer. You'll probably hear and lot of hemming, hawing and mumbo jumbo.

I've read many stories similar to this, and it appears that divorce lawyers just don't have a clue about real estate issues -- especially about refinancing a mortgage, getting a modification, etc.

It makes me feel bad that so many people are in situations similar to yours because their divorce lawyers didn't know what the heck they were doing.

Sounds like selling the house may be a possibility if you have any equity in it. What provision did your divorce lawyer make in that case? Of course, if you have no equity and can't do anything else, you'll have to let it foreclosure. I guess the only good thing about that is that it will ruin your ex-husband's credit, but not yours since you're not on the loan! You'll be able to re-start your life with a new place and clean credit.

Good luck to you.