Previous Loan Modification and Trying to Refinance

STARTING OVER

LoanSafe Member
Jan 30, 2013
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Hi StartingOver,
Yes, since your mortgage was charged off longer than 4 years ago you should be able to qualify for a new loan. As long as you fit the other criteria we should be fine. The automated underwriting system will also give us feedback as well.

Please feel free to reach out to me at [email protected]

Thank you for your quick reply. Does it matter that the second is still showing on my credit report?
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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San Diego, California
www.loansreduced.com
No it shouldn't, here are the specific guidelines on a charged off mortgage account:

• A charge-off of a mortgage account occurs when a creditor has determined that there is little (or no) likelihood that the mortgage debt will be collected.

• Mortgage accounts, including first liens, second liens, home improvements loans, HELOCs, and manufactured home loans, will be identified as a charge-off if there is an MOP code of "9" (collection or charge-off) and there is no information indicating the account may also be subject to a foreclosure (MOP code "8" or foreclosure Remarks Code), a bankruptcy (MOP code "7"), a deed-in-lieu of foreclosure (DIL Remarks Code), or a preforeclosure sale (PFS Remarks Code).

When DU identifies a charge-off on a mortgage tradeline, the lender must confirm the accuracy of the information. The lender must also document that the event was completed four or more years from the disbursement date of the new loan, or two or more years from the disbursement date of the new loan when the lender confirms that the mortgage loan meets the applicable timeframes and eligibility requirements for a charge-off due to extenuating circumstances.
 

STARTING OVER

LoanSafe Member
Jan 30, 2013
21
0
1
No it shouldn't, here are the specific guidelines on a charged off mortgage account:

• A charge-off of a mortgage account occurs when a creditor has determined that there is little (or no) likelihood that the mortgage debt will be collected.

• Mortgage accounts, including first liens, second liens, home improvements loans, HELOCs, and manufactured home loans, will be identified as a charge-off if there is an MOP code of "9" (collection or charge-off) and there is no information indicating the account may also be subject to a foreclosure (MOP code "8" or foreclosure Remarks Code), a bankruptcy (MOP code "7"), a deed-in-lieu of foreclosure (DIL Remarks Code), or a preforeclosure sale (PFS Remarks Code).

When DU identifies a charge-off on a mortgage tradeline, the lender must confirm the accuracy of the information. The lender must also document that the event was completed four or more years from the disbursement date of the new loan, or two or more years from the disbursement date of the new loan when the lender confirms that the mortgage loan meets the applicable timeframes and eligibility requirements for a charge-off due to extenuating circumstances.
HI Erik:

Thank for answering my questions about refinancing. I have just a few more questions if you have the time. My loan with Nationstar is in my ex-husband's and my name. Our loan was modified in 2009, we divorced in March 2011 and the property was quit claimed to me in July 2011. I have made all of the payments on the loan since the modification and that can be proved by my bank statements and income tax forms. I have no idea where my ex husband is - last time I found him he was in jail. Do I have to go through Nationstar to assume the loan before I refinance and does that mean I can only refinance with Nationstar? Thank you so much for your time.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,065
162
63
San Diego, California
www.loansreduced.com
Hi StartingOver,
Anytime that's what we are here for.

In regards to assuming the loan, you can reach out to Nationstar (or Mr. Cooper as they call it now) and ask to speak with the assumptions department. They will tell you the documentation they would typically need for an assumption. It sounded like you had already gone through that process and they mixed everything up between you and your ex husband which is quite strange.

For a refinance you can work with any company, you don't have to work with NationStar in order to get that done. It would be treated just like regular refi and all typical documentation would be required: income, assets...etc.
 

STARTING OVER

LoanSafe Member
Jan 30, 2013
21
0
1
Hi StartingOver,
Anytime that's what we are here for.

In regards to assuming the loan, you can reach out to Nationstar (or Mr. Cooper as they call it now) and ask to speak with the assumptions department. They will tell you the documentation they would typically need for an assumption. It sounded like you had already gone through that process and they mixed everything up between you and your ex husband which is quite strange.

For a refinance you can work with any company, you don't have to work with NationStar in order to get that done. It would be treated just like regular refi and all typical documentation would be required: income, assets...etc.

Erik: I never tried to take my ex-husband off the Nationstar mortgage because I was afraid it would somehow mess up the modification. I just kept making all the payments. Now that I'm in a better financial position, I would very much like to get him off the loan and then refinance. Do you think I have chance of assuming the loan with the charged off second on my credit report? That's the only ding on my credit albeit a big one! I still am afraid of somehow messing up my mortgage by "waking up" Nationstar to all of this. Thank you again.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,065
162
63
San Diego, California
www.loansreduced.com
I would doubt they have to have any interaction with the 2nd lien holder for two reasons.

1. Because the lien has been charged off and been deemed as uncollectable debt
2. The assumption is not a refinance where you would typically have to subordinate a lien, however in a case of a charged off mortgage I believe you don't have to do that either because the lien should no longer be affecting title (from what I know), I can ask underwriting about this and let you know what they say.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,065
162
63
San Diego, California
www.loansreduced.com
I've sent in a question to underwriting to determine if we would have to subordinate the charge off 2nd lien when doing a refinance. That could be a road block if they require it to be subordinated as a past due/charged off lien seems like it would be difficult to get them to agree to keeping it as 2nd position. You would think they would want to revert to 1st position because if something was to happen to the property they would get paid off first. If they were to not agree to a subordination that could cause an impact to a 1st lien refinance.

When it comes to the assumption you shouldn't have to subordinate because you're not changing the loan terms, it's not a refinance rather just modifying the current lien to change who is liable for it.
 

STARTING OVER

LoanSafe Member
Jan 30, 2013
21
0
1
I've sent in a question to underwriting to determine if we would have to subordinate the charge off 2nd lien when doing a refinance. That could be a road block if they require it to be subordinated as a past due/charged off lien seems like it would be difficult to get them to agree to keeping it as 2nd position. You would think they would want to revert to 1st position because if something was to happen to the property they would get paid off first. If they were to not agree to a subordination that could cause an impact to a 1st lien refinance.

When it comes to the assumption you shouldn't have to subordinate because you're not changing the loan terms, it's not a refinance rather just modifying the current lien to change who is liable for it.
Thank you so much Erik. Please let me know what you find out. I hope CCO doesn't have to agree to anything because I've heard they are VERY difficult to work with. Have a great evening.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,065
162
63
San Diego, California
www.loansreduced.com
No problem, I should know here most likely by tomorrow morning. The department may be closed already unfortunately.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,065
162
63
San Diego, California
www.loansreduced.com
Underwriting did get back to me and asked if it's a lien that is still on the property? We would need title/attorney to verify. If it was a charged off than it usually wouldn't be a lien any longer.

This would mean in my eyes that we do not have to subordinate the 2nd because it's no longer a lien. I am still confirming that aspect of it as well for you.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,065
162
63
San Diego, California
www.loansreduced.com
If there is no lien, there is nothing to subordinate as I expected. I would say let's jump in and get through underwriting prior to ordering appraisal to make sure we overcome all hurdles that need to be overcome.
 

STARTING OVER

LoanSafe Member
Jan 30, 2013
21
0
1
If there is no lien, there is nothing to subordinate as I expected. I would say let's jump in and get through underwriting prior to ordering appraisal to make sure we overcome all hurdles that need to be overcome.
Thanks for getting back to me Erik. Am I correct in that my first step towards a refinance is to assume the loan with Nationstar? Also, do I need to do a title search myself? Again, thank you so much for your help.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,065
162
63
San Diego, California
www.loansreduced.com
I can do the title search to see if anything has changed, please e-mail me the property address at: [email protected].

You can work with the assumptions department or go through a traditional refinance. If the terms on your loan now are less than 4.25% interest than it may be a good idea to try the assumption vs a regular refinance. Whatever direction that you would like to take I would be more than happy to help.
 

STARTING OVER

LoanSafe Member
Jan 30, 2013
21
0
1
I can do the title search to see if anything has changed, please e-mail me the property address at: [email protected].

You can work with the assumptions department or go through a traditional refinance. If the terms on your loan now are less than 4.25% interest than it may be a good idea to try the assumption vs a regular refinance. Whatever direction that you would like to take I would be more than happy to help.
Hi Erik. I just sent you an email. Thanks again.
 

OneHugeMess

LoanSafe Member
May 30, 2016
492
35
28
Hello Anthony Eddolls from Denver, CO!

I'm posting your full name, so when people Google you - they find this post. I have to say, a mortgage broker that chooses to spam himself all over the net - doesn't exactly make me feel comfortable. It strikes me as dirty. And, In fact, if I was going to borrow money - I would be entirely concerned that someone unscrupulous like you, would sale me a toxic horrible loan.

Here's to hoping you practice better ethics when dealing with your actual customers. *crosses fingers*