What is the name of your state (only U.S. law)? WI
My Fiance's X still has her on his mortgage. He refuses to take her off. Well since last November he has not made a house payment. And it is killing her credit. Last summer we filed a quit claim deed with the county the house resides in. How can we force him to take her name off the mortgage? This July we are getting married and we I will have her sign a prenup so my house is not affected. But we need to get her off of this to save her credit...
Any help? Thanks in advance
I am a mortgage servicer (MHA Single Point of Contact).
I deal with this situation on a very steady and regular basis.
Firstly, stop saying "HER EX WON'T TAKE HER OFF THE MORTGAGE". It's not his decision and he has ZERO control over it. The investor isn't going to be idiotic enough to grant him an assumption or refinance when the loan isn't current. They have two borrowers on the hook instead of one. If one can't pay it, they'll come after the other.
She deeded the property to him via quitclaim deed. It removes her from the deed, but not the responsibility of the note. Furthermore, you cannot remove her from the loan itself unless he decides to refinance and remove her. I highly doubt, from what you've mentioned, that he is in a position to do so. The other way to remove her would be for him to assume the loan. Again, I highly doubt the bank is going to grant this. Why would they? Think of it from their point of view.
My question to you, is why in the heck would you guys file a quitclaim deed in the first place!? Was she under the assumption that it would remove her from the loan? If so, I agree with the poster above that states it was a monumentally huge mistake to file a QCD. She's now given up her share of the interest in the property but is still responsible to pay it if things go south.
The only reason I can fathom would justify, in your minds, to file a quit claim deed would be if her ex were trying to apply for modification or something to that effect. A QCD would allow the servicer to review for one with only his information.
If he lets it go to foreclosure the investor may decide to PURSUE A DEFICIENCY against BOTH note holders.
Welcome to the downside of the quitclaim deed.
So, at this point the options are (for her ex) to decide if he wants to keep the home or not.
If he does the options are:
1) Modification. MHA's HAMP Tier 1 or Tier 2 would be the obvious first choice if it was purchased before January 2009 and meets the debt to income, imminent default testing, and net present value testing and all the other hoops the loan has to go through.
2) Some sort of special forbearance or repayment plan.
If he doesn't want the home:
1) Short sale. Again, MHA's HAFA would be the obvious choice if qualified. The HAFA SSA plan (Short Sale Agreement) would put him in forbearance for 120 days to allow time for marketing and to get an offer. No payments during the 120 days.
Once an offer is rec'vd a HAFA short sale can be submitted. HAFA now offers up to $10,000 in relocation assistance. If it isn't HAFA eligible then an in house short sale would be the next best thing.
2) A DIL (Deed In Lieu of Foreclosure). Again a HAFA DIL would offer the up to $10,000 relocation assistance as an incentive.
Also, a short sale or a DIL will reflect on her credit as well because she is STILL a borrower.
If he doesn't want to cooperate and lets it go into foreclosure her credit is going to be screwed, all because of the quitclaim deed.
Technically he could sit in the house until it forecloses, then file bankruptcy, and guess who would be on the hook for the whole thing? Yup, you guessed it... your fiance!
......Oh and by the way, just in case you're wondering after reading this.... No, she would not be entitled to ANY of the HAFA $10,000 relocation assistance if he sells or does a DIL courtesy of the quitclaim deed.
Aren't you guys glad you researched it BEFORE she signed it instead of AFTER?
