Mortgage Payment Responsibility

[meatball2012]

What is the name of your state (only U.S. law)? Washington

My husband and I bought a house in April of 2009 and then we seperated in November 2009. The home has no accrued equity. I have not been living in the house and he has since got another roommate. He has been making the payments but my name is still on the loan. I have no interest in keeping the house and I want my name off of the loan. Can he refinance if we are still legally married without having to count my income? I do not want to sign the divorce papers giving him all rights to the house before my name is taken off the loan. Is the only way to get my name off to refinance?

 

[mistoffolees]

What is the name of your state (only U.S. law)? Washington

My husband and I bought a house in April of 2009 and then we seperated in November 2009. The home has no accrued equity. I have not been living in the house and he has since got another roommate. He has been making the payments but my name is still on the loan. I have no interest in keeping the house and I want my name off of the loan. Can he refinance if we are still legally married without having to count my income? I do not want to sign the divorce papers giving him all rights to the house before my name is taken off the loan. Is the only way to get my name off to refinance?

Simply have the divorce papers cover it - he gets the house but is required to refinance within 60 days. If he doesn't do so, the house must be put on the market - if not sold within 1 year, you get to control the sale --- or something like that.

It is possible for him to refinance in his name while you're married, but many banks won't allow it. It could also lead to other problems (liabilities, property division, etc), so it's better to cover it all in the divorce decree. However, do NOT sign the quit claim deed except at the closing table for his refinance.

 

[LdiJ]

Simply have the divorce papers cover it - he gets the house but is required to refinance within 60 days. If he doesn't do so, the house must be put on the market - if not sold within 1 year, you get to control the sale --- or something like that.

It is possible for him to refinance in his name while you're married, but many banks won't allow it. It could also lead to other problems (liabilities, property division, etc), so it's better to cover it all in the divorce decree. However, do NOT sign the quit claim deed except at the closing table for his refinance.

I agree 100% with this.

However, there is almost no chance that he is going to be able to refinance at this point unless he has a significant chunk of cash to take to the closing table. (think 20% of the home's appraised value) If its sold now its unlikely that it can be sold for enough to cover the mortgage plus closing costs/realtor fees, so the OP would end up having to put up money at the closing table or have her credit dinged by a short sale.

Therefore, if he is the type of person who cares about his credit, and would make sure that the payments got made, I would be inclined to give him a couple of years to refinance.

Yes, OP's credit would be tied up for a couple of years, but his odds of being able to refinance would increase significantly.

 

[Golfball]

Simply have the divorce papers cover it - he gets the house but is required to refinance within 60 days. If he doesn't do so, the house must be put on the market - if not sold within 1 year, you get to control the sale --- or something like that.

It is possible for him to refinance in his name while you're married, but many banks won't allow it. It could also lead to other problems (liabilities, property division, etc), so it's better to cover it all in the divorce decree. However, do NOT sign the quit claim deed except at the closing table for his refinance.

I don't know if this has changed with the credit crunch (so take with appropriate amount of salt), but it is (or at least was) possible to refi (or otherwise encumber the home) in just one spouse's name leaving the other spouse off the mortgage, as my wife & I did just that (with Wells Fargo) back in 2007. I (the non-liable spouse) did have to sign paperwork acknowledging the existence of the debt (and consent to same), but my income/debts nor credit score were not considered.

 

[mistoffolees]

I don't know if this has changed with the credit crunch (so take with appropriate amount of salt), but it is (or at least was) possible to refi (or otherwise encumber the home) in just one spouse's name leaving the other spouse off the mortgage, as my wife & I did just that (with Wells Fargo) back in 2007. I (the non-liable spouse) did have to sign paperwork acknowledging the existence of the debt (and consent to same), but my income/debts nor credit score were not considered.

I did that, as well, but it requires an excellent credit score as well as sufficient equity (in my case, equity was around 50% of the home value).

I suggested that as an option, but given that there's little or no equity, it is going to be difficult.