Posted on: 11th Apr, 2011 12:49 pm
hello all,
here's our situation; i have been divorced for 2 years. i primarily live in the marital property. we have tried selling the property, but haven't recieived any offers in 2 years. my ex and her new husband want to refinance and move into the house. our first mortgage is through citimortgage, with a heloc from a local cu.
the cu is fine with subordinating the heloc. the bank's recent appraisal was well over what is owed on the property. my ex and her husband's income, debt, and credit all are within acceptable limits for refinance.
here's the issue... neither my ex or i could afford the monthly mortgage payments on our salaries individually, so we have jointly paid the mortgage for two years to keep current on the loans. citimortgage claims that since my ex did not make these payments on her own, that the refinance cannot be granted ("12 month rule").
my ex jointly applied for the refi with her new husband, and we are all floored by this snag. has anyone else experienced this issue? are there any suggestions for other lender programs which may apply?
thanks!
here's our situation; i have been divorced for 2 years. i primarily live in the marital property. we have tried selling the property, but haven't recieived any offers in 2 years. my ex and her new husband want to refinance and move into the house. our first mortgage is through citimortgage, with a heloc from a local cu.
the cu is fine with subordinating the heloc. the bank's recent appraisal was well over what is owed on the property. my ex and her husband's income, debt, and credit all are within acceptable limits for refinance.
here's the issue... neither my ex or i could afford the monthly mortgage payments on our salaries individually, so we have jointly paid the mortgage for two years to keep current on the loans. citimortgage claims that since my ex did not make these payments on her own, that the refinance cannot be granted ("12 month rule").
my ex jointly applied for the refi with her new husband, and we are all floored by this snag. has anyone else experienced this issue? are there any suggestions for other lender programs which may apply?
thanks!
If your ex is on the existing mortgage, should be able to refinance.
The Citimortgage guideline is to address someone who was on title but not on the original NOTE. I believe your ex was on the original NOTE, therefore, would seem to be ok.
If your ex was not on the original NOTE, that is a problem potentially and appears to be so with Citimortgage.
Is there a divorce decree which awards the poroerty ot your ex?
The Citimortgage guideline is to address someone who was on title but not on the original NOTE. I believe your ex was on the original NOTE, therefore, would seem to be ok.
If your ex was not on the original NOTE, that is a problem potentially and appears to be so with Citimortgage.
Is there a divorce decree which awards the poroerty ot your ex?
Thanks John,
Both my ex and I are on the deed, first and second mortgages. The separation agreement states that we sell the house, pay off marital debt, and split remaining proceeds. That was over two years ago...
I have had the agreement recently updated to reflect that my ex and her husband will refinance both first and second mortgages to remove me from the deed and financial liability.
Citimortgage informed my ex last week that they will not qualify for the HARP refinance because she did not solely pay the mortgage for 12 months prior to refinance. Citimortgage told us that this is a Freddie/Fannie requirement. The mortgage rep with Citi then told my ex that she and her husband would have no problem qualifying for another refi program, but that hope was short-lived since that same 12 month requirement reared it's ugly head again. We're at a loss!
Both my ex and I are on the deed, first and second mortgages. The separation agreement states that we sell the house, pay off marital debt, and split remaining proceeds. That was over two years ago...
I have had the agreement recently updated to reflect that my ex and her husband will refinance both first and second mortgages to remove me from the deed and financial liability.
Citimortgage informed my ex last week that they will not qualify for the HARP refinance because she did not solely pay the mortgage for 12 months prior to refinance. Citimortgage told us that this is a Freddie/Fannie requirement. The mortgage rep with Citi then told my ex that she and her husband would have no problem qualifying for another refi program, but that hope was short-lived since that same 12 month requirement reared it's ugly head again. We're at a loss!
Hi Lew!
Welcome to forums!
I haven't heard of such a rule which states that your ex and her husband won't be able to refinance as she did not solely pay the mortgage for 12 months prior to refinance. As John says, your ex can refinance the mortgage if her name is on the property and the mortgage. I will suggest her to speak to the other lenders of her area and apply for a refinance with them.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
I haven't heard of such a rule which states that your ex and her husband won't be able to refinance as she did not solely pay the mortgage for 12 months prior to refinance. As John says, your ex can refinance the mortgage if her name is on the property and the mortgage. I will suggest her to speak to the other lenders of her area and apply for a refinance with them.
Feel free to ask if you've further queries.
Sussane
Hi Sussane,
Thank you for your feedback. I had a conversation with my ex and her husband last night. They confirmed that Citimortgage rejected their HARP application because the last 12 months of mortgage payments were not made soley by her.
Here is a blurb from the Citimortgage rep I received yesterday...
"To use the government program to avoid the debt to income issue, she would have to make the 12 months of payments on her own to remove your name using that program." From what I'm hearing now, my ex's debt/income ratio is too high to qualify for another traditional refi program.
What can be done to allow my ex and her husband to refinance, take over the property, and remove me from liability? Should they go to another lender and try HARP qualification again?
Thank you for your feedback. I had a conversation with my ex and her husband last night. They confirmed that Citimortgage rejected their HARP application because the last 12 months of mortgage payments were not made soley by her.
Here is a blurb from the Citimortgage rep I received yesterday...
"To use the government program to avoid the debt to income issue, she would have to make the 12 months of payments on her own to remove your name using that program." From what I'm hearing now, my ex's debt/income ratio is too high to qualify for another traditional refi program.
What can be done to allow my ex and her husband to refinance, take over the property, and remove me from liability? Should they go to another lender and try HARP qualification again?
The HARP program is definitely not a possibility. That was not part of the orignal question.
The original question was about "refinancing" and I just assumed you were referring to regular refinancing, not a refinance under HARP guidelines.
The mortgage guideline in question is the "Continuity of Obligation". It requires that at least one person on title remian on title. Unlike HARP, there is no requirement that the person who was on title and stays on title have made the payments themselves and qualifies on their own.
A regular refinance should be possible. If Citi will not do it, check with another lender.
In what state is the property located?
The original question was about "refinancing" and I just assumed you were referring to regular refinancing, not a refinance under HARP guidelines.
The mortgage guideline in question is the "Continuity of Obligation". It requires that at least one person on title remian on title. Unlike HARP, there is no requirement that the person who was on title and stays on title have made the payments themselves and qualifies on their own.
A regular refinance should be possible. If Citi will not do it, check with another lender.
In what state is the property located?
Good morning John,
The property is located in New York (Hudson Valley region). My ex would remain on the title, with her new husband replacing me on the mortgage and deed.
Why won't a lender won't look at my ex and her husband jointly when qualifying them for refinance? Since her husband is not on the deed or existing mortgage, can he purchase the property from us?
There must be a way that this transaction can work. They want the property, are not looking for anything other than to basically relieve me of the liability.
As far as HARP, is this "12 month rule" an iron clad requirement, or a Citimortgage requirement?
The property is located in New York (Hudson Valley region). My ex would remain on the title, with her new husband replacing me on the mortgage and deed.
Why won't a lender won't look at my ex and her husband jointly when qualifying them for refinance? Since her husband is not on the deed or existing mortgage, can he purchase the property from us?
There must be a way that this transaction can work. They want the property, are not looking for anything other than to basically relieve me of the liability.
As far as HARP, is this "12 month rule" an iron clad requirement, or a Citimortgage requirement?
Harp is a hard rule. It is Fannie Mae and Freddie Mac requirement and it is different than the regular refinance "Continuity of Obligation". HARP is a refinance with the "same" owner of the mortgage" and it is the same mortgage, esentially, not a new mortgage. HARP does not let anyone replace a Borrower with another Borrower in order to qualify for the mortgage.
A new mortgage has "continuity of obligation" requirements, but they are different. If anyone was on title and stays on title, it should meet the continuity of obligation requirement. I could be incorrect, but, I can check further if you want me to do so.
I am licensed in New York.
A new mortgage has "continuity of obligation" requirements, but they are different. If anyone was on title and stays on title, it should meet the continuity of obligation requirement. I could be incorrect, but, I can check further if you want me to do so.
I am licensed in New York.