Posted on: 14th Nov, 2008 06:20 pm
for the last three and one-half years i have been making monthly payments to countrywide for a mortgage on my mother-in law's property. the mortgage is in my mother-in-law's ex-husbands name but my mother-in-law own's and currently lives in the property. further confounding the situation we do not know the whereabouts of the ex.
to be clear- there is a formalized divorce decree wherein she is granted the property. the ex has signed and recorded a quit claim deed a few years back, but his name remains the only one on the loan.
since my wife and i have been paying the loan we want to solidify our interests and remove the ex from the picture...seems pretty simple right?
countrywide tells me that there is nothing we can do to to remove him from the loan without his authorization. unfortunately the divorce was ugly, to say the least, and the circumstances leading thereto involved abuse and alcoholism. for fear of safety, there is a reluctance to search out the ex and if we were able to locate him we seriously doubt there would be a willingness to cooperate.
there are two questions i am trying to figure out:
1) if his name is on the loan and but not on the property if the loan goes into default can they still foreclose on an asset not owned by the borrower?
2) is countrywide just feeding me a bunch of bs- under these circumstances why cannot a qualified borrower with title simply assume the loan?
looking for solutions.
thanks for anything you can offer.
to be clear- there is a formalized divorce decree wherein she is granted the property. the ex has signed and recorded a quit claim deed a few years back, but his name remains the only one on the loan.
since my wife and i have been paying the loan we want to solidify our interests and remove the ex from the picture...seems pretty simple right?
countrywide tells me that there is nothing we can do to to remove him from the loan without his authorization. unfortunately the divorce was ugly, to say the least, and the circumstances leading thereto involved abuse and alcoholism. for fear of safety, there is a reluctance to search out the ex and if we were able to locate him we seriously doubt there would be a willingness to cooperate.
there are two questions i am trying to figure out:
1) if his name is on the loan and but not on the property if the loan goes into default can they still foreclose on an asset not owned by the borrower?
2) is countrywide just feeding me a bunch of bs- under these circumstances why cannot a qualified borrower with title simply assume the loan?
looking for solutions.
thanks for anything you can offer.
Hi bkrafty,
Welcome to the forums.
Even if the borrower's name is not on the title to the property, yet I guess the lender can foreclose the asset because it was initially considered as the collateral for the mortgage.
Countrywide is quite justified in saying that the borrower can be removed from the loan only after authorization. At the same time, I understand your reluctance to search out the ex-husband.
Well, the only way out of this situation, I guess, is to talk to the ex-husband and have the loan refinanced in your mom-in-law's name or your name, because as it is you are paying for the loan.
Take care
Welcome to the forums.
Even if the borrower's name is not on the title to the property, yet I guess the lender can foreclose the asset because it was initially considered as the collateral for the mortgage.
Countrywide is quite justified in saying that the borrower can be removed from the loan only after authorization. At the same time, I understand your reluctance to search out the ex-husband.
Well, the only way out of this situation, I guess, is to talk to the ex-husband and have the loan refinanced in your mom-in-law's name or your name, because as it is you are paying for the loan.
Take care
the easiest thing to do is to simply continue making payments. you indicate an unwillingness to contact the ex-husband along with an inability to contact him. countrywide is correct - they cannot simply remove a name from a note; it's there permanently. that's why signatures are in ink.
your question about the possibility of foreclosure is pretty simply answered. a mortgage is a pledge to make payments and the collateral is the real estate. if payments don't get made, then the lender takes steps to redeem its collateral. therefore, no matter the title picture at this point, the lender is likely to begin a foreclosure action if the payments cease.
you're not in a very good position to bargain at all.
your question about the possibility of foreclosure is pretty simply answered. a mortgage is a pledge to make payments and the collateral is the real estate. if payments don't get made, then the lender takes steps to redeem its collateral. therefore, no matter the title picture at this point, the lender is likely to begin a foreclosure action if the payments cease.
you're not in a very good position to bargain at all.
I have no intention of discontinuing the payment it just seems a weird situation where rights are unclear.
In terms of getting this sorted out, I had someone suggest to me that I go into a contract for deed with my mother-in-law, pay the agreed payment and terms to her for 12 months then refi in my name.
The house is worth ~350-400K and the existing loan is only ~120K.
If I go into a contract for deed with my mother in law can I secure a refi? (assuming I qualify)
In terms of getting this sorted out, I had someone suggest to me that I go into a contract for deed with my mother-in-law, pay the agreed payment and terms to her for 12 months then refi in my name.
The house is worth ~350-400K and the existing loan is only ~120K.
If I go into a contract for deed with my mother in law can I secure a refi? (assuming I qualify)
i just love it when "someone" gets involved. usually, "someone" is a friend who just happens to have an opinion or four, or who happens to have had a friend somewhere who "just did this" or "knows someone else who did this."
something makes me a little leery of trusting "someone" to advise me on my financial affairs. enough editorializing on my part now...
okay, i would be a little bit curious to know what your mother-in-law's lender would have to say about her transfer of property rights to you outside her contract with them. but of course, if they don't know about it...
next, if your intention is to obtain a mortgage anyway, why not arrange for a purchase contract and go get that mortgage now? you ought to be in fine shape that way, given the value you've cited and the existing balance. you could even do a gift of equity - after all, it's all in the family.
something makes me a little leery of trusting "someone" to advise me on my financial affairs. enough editorializing on my part now...
okay, i would be a little bit curious to know what your mother-in-law's lender would have to say about her transfer of property rights to you outside her contract with them. but of course, if they don't know about it...
next, if your intention is to obtain a mortgage anyway, why not arrange for a purchase contract and go get that mortgage now? you ought to be in fine shape that way, given the value you've cited and the existing balance. you could even do a gift of equity - after all, it's all in the family.
"someone" was actually a broker @ Countrywide! But generally I agree with you.
First the mother in law does not have a contract with the lender- the ex does....not sure if this matters or not, but right now the contract with the lender and title to the property are in different hands.
In treating it as a purchase, since this would be a non-owner occupied 2nd home gifting of equity is pretty restricted. Furthermore since the "purchase" would not be for the actual value the LTV would be relatively high ~80% of a 150K price. So the loan terms would be less than optimal.
It was my understanding that going the contract for deed route allowed me to purchase at a low price ~120K then after a year of payments refi against the actual value.
First the mother in law does not have a contract with the lender- the ex does....not sure if this matters or not, but right now the contract with the lender and title to the property are in different hands.
In treating it as a purchase, since this would be a non-owner occupied 2nd home gifting of equity is pretty restricted. Furthermore since the "purchase" would not be for the actual value the LTV would be relatively high ~80% of a 150K price. So the loan terms would be less than optimal.
It was my understanding that going the contract for deed route allowed me to purchase at a low price ~120K then after a year of payments refi against the actual value.
this is so convoluted.
if the property transferred from one party to another, then the "contract" between lender and borrower (the mortgage) is due and payable in full upon transfer. does countrywide have no notion of what's transpired? it would seem so.
you're right - purchasing isn't going to work at this time.
does your "someone" contact have the wherewithal to go on record that your contract for deed scheme will work? keep in mind that what we knew in november of 2007 no longer works in november of 2008. we have no way of assuring ourselves of anything from today working in a year, in my opinion.
i'd suggest legal counsel at this time. you've got so much on the plate here - a borrower who is missing; an owner who has no relationship with the lender that has the mortgage; yourself - making payments on a loan with no stipulations or assurances of recovery; a lender who is apparently unaware of all of the above.
if the property transferred from one party to another, then the "contract" between lender and borrower (the mortgage) is due and payable in full upon transfer. does countrywide have no notion of what's transpired? it would seem so.
you're right - purchasing isn't going to work at this time.
does your "someone" contact have the wherewithal to go on record that your contract for deed scheme will work? keep in mind that what we knew in november of 2007 no longer works in november of 2008. we have no way of assuring ourselves of anything from today working in a year, in my opinion.
i'd suggest legal counsel at this time. you've got so much on the plate here - a borrower who is missing; an owner who has no relationship with the lender that has the mortgage; yourself - making payments on a loan with no stipulations or assurances of recovery; a lender who is apparently unaware of all of the above.
Legal help is certainly on the short list of to-do's- it's been my experience with Lawyers that its best (for the pocketbook) to come to them with a specific proposal for them to evaluate (as opposed to open ended questions).
To this end I am trying to assess what might be a workable solution on the financing side. I've talked multiple times to the lender so they are aware of the situation- they cannot talk to me about the loan and/or refinancing options related thereto (as outlined above).
In terms of the contract for deed scheme it sounds too simple given the convoluted situation- agreed. However to date it is the only thing I've heard that get's even close to a solution.
I hope the thread is living up to its title :)
To this end I am trying to assess what might be a workable solution on the financing side. I've talked multiple times to the lender so they are aware of the situation- they cannot talk to me about the loan and/or refinancing options related thereto (as outlined above).
In terms of the contract for deed scheme it sounds too simple given the convoluted situation- agreed. However to date it is the only thing I've heard that get's even close to a solution.
I hope the thread is living up to its title :)