Joint Mortgage after divorce/Quit Claim

[upita]

What is the name of your state (only U.S. law)? I was married and divorced in Florida. We had (have) a mortgage jointly. In leaving the marriage, I was asked to sign a Quit Claim Deed, which I did. He was to refinance to remove my name...however, it has been almost 2 years and this hasn't happened because he says they want over $8,ooo in closing costs to refinance. The loan will be paid off in 7 1/2 years......In the meantime, I have moved to another state and this mortgage on my credit has my income to debt ratio out of whack so that I cannot purchase a home or land. Furthermore, I have no claim to the home due to the Quit Claim Deed, but I'm apparently still legally responsible if anything happens to him...?....even though his daughters will inherit the home because he hasn't remarried and has no will......? Is there ANYTHING I can do about this? Thank you....

 

[ecmst12]

Not at this point. You shouldn't have signed the quit claim until the refinance was complete.

 

[tranquility]

What did the court order say on the matter?

 

[nanu156]

So are you looking for contempt... or just to buy a house?

If it is not your goal to smack him in the face in court, then what you need to do to get a new mortgage is below;

Have him send you proof that he is making the payments and has made them for the last 12 months, canceled checks are best, bank statements will also work.
True copy of divorce decree
and a copy of the quit claim deed.

PRESTO CHANGO!!!!!!! DTI FIXED! (DTI is debt to income)

So when you apply for your new loan you simply provide the above listed paperwork to the loan officer and they will go ahead and help you get a new loan on a different home.

If you want to go at him for contempt you sure can. I don't know how much you want to fight..... 8K in closing costs is a ton for a loan that is that close to being paid in full. But again to each his own. If you want to go the contempt route it will take longer...
1. File for contempt in court where divorce was final
2. wait for hearing
3. wait for ex to apply for mortgage, and then complete the closing process

BLEH

 

[justalayman]

if the divorce orders directed him to refinance the home, your recourse would be to seek to have the order enforced. Unless there is an exception that he doesn't have to pay $8000 in closing costs, he has no right to use that as excuse.


but I have to wonder about somebody paying $8k in closing on a refi. Sounds way out of line to me. He can refi at any bank so he can speak with other banks as well.

 

[nanu156]

if the divorce orders directed him to refinance the home, your recourse would be to seek to have the order enforced. Unless there is an exception that he doesn't have to pay $8000 in closing costs, he has no right to use that as excuse.


but I have to wonder about somebody paying $8k in closing on a refi. Sounds way out of line to me. He can refi at any bank so he can speak with other banks as well.

The state of Fl has tax stamps on mortgages, and title insurance is very high there as well due to there being a higher than avg rate of claims.

Additionally Im going to bet the ex is counting escrow impounds as "closing costs" and Id be willing to bet they are high as heck likely due to higher than average county property taxes. Low loan amounts also tend to get whacked with fees.

In any event, she is certainly able to peruse him in civil court. The alternate solution assuming things are pleasant between the two of them is to just document that it is not a debt that she is responsible to pay thus removing it from her DTI.

 

[justalayman]

escrow impounds? You mean like what OP can transfer from his existing escrow account to the new one? Beyond that, who is to say there is an escrow account?

recording taxes would be $1375 on a $250,000 mortgage. I don't recall seeing anything as to what is owed so I just grabbed a number.

If the guy has an owners title policy, it remains intact.

In any event, she is certainly able to peruse him in civil court. The alternate solution assuming things are pleasant between the two of them is to just document that it is not a debt that she is responsible to pay thus removing it from her DTI.

that won't cut it. She is still legally liable until her name is removed from the loan. If you think a letter of indemnification means something, realize that the guy is ignoring a court order right now. Do you really such a letter would mean anything?


bottom line: there is no legal justification for the guy to not re-fi. It is what the court ordered. No reason OP shouldn't demand he comply with the order and I'm not seeing a financial justification either.

 

[nanu156]

escrow impounds? You mean like what OP can transfer from his existing escrow account to the new one? Beyond that, who is to say there is an escrow account?

recording taxes would be $1375 on a $250,000 mortgage. I don't recall seeing anything as to what is owed so I just grabbed a number.

If the guy has an owners title policy, it remains intact.

First, you don't transfer escrow impounds, you get refunded your old escrow balance, and you start a new escrow account. sometimes, in a streamline refi, maybe or maybe not depends on the lender.

Title insurance and closing fees per the title company will be re-assessed. In Miami Dade County the title fees will be roughly 1200, there are roughly 1550 in fees due directly to flordia for tax stamps and recording fees. So nearly 3000, (that math adds to 2700, give me some buffer room here) before the cost of appraisal etc.

If 5000/yr was used for property taxes in this scenario (which would be low if they owed 250k) and they were due in January the tax escrow would be 4800+, 2000 in insurance say another grand paid into escrow for that.

There is 8,000.00+

Now escrows are not fees, they are escrows... how many people actually know that? Know how many times a day I get to explain that? lots. and lots. Then some more.

that won't cut it. She is still legally liable until her name is removed from the loan. If you think a letter of indemnification means something, realize that the guy is ignoring a court order right now. Do you really such a letter would mean anything?


bottom line: there is no legal justification for the guy to not re-fi. It is what the court ordered. No reason OP shouldn't demand he comply with the order and I'm not seeing a financial justification either.

So is everything so black and white to you? Some people and I am willing to guess that this poster may be one of them get along ok with their ex's. She hasn't messed with him yet on contempt, and her concern didn't seem to be "make him do what the order says" or "so worried about my credit" it was "I can't get a mortgage because my ratios don't work" So I answered her specific question on how to make her ratios work.

I said several times the she absolutely could file in court to make him refi.

POSTER- if you would like to provide me with the mortgage balence, the estimated value and the county of the property I can get you a pretty good idea of his actual costs on a 15yr and 10yr mortgage.

Or we can continue to argue about if he is a BAD BAD MAN, and poster should make him comply. Which she should if thats what she wants to do, I was just reading that what she actually WANTS is to buy a home.

 

[justalayman]

nanu156;3086710]First, you don't transfer escrow impounds, you get refunded your old escrow balance, and you start a new escrow account. sometimes, in a streamline refi, maybe or maybe not depends on the lender.

I take them out. I put them in the new account- viola` they have been transferred.

In Miami Dade County the title fees will be roughly 1200, there are roughly 1550 in fees due directly to flordia for tax stamps and recording fees. So nearly 3000, (that math adds to 2700, give me some buffer room here) before the cost of appraisal etc.

Unless you have an amount of the mortgage, none of those can be established, but if you want to use the $250,000 with a 2 page deed and a 10 page mortgage, we have this, and this is from the dade county clerk of the court

presuming a mortgage of $250,000


doc stamps- deed: based on home price. there is no home price since it isn't a sale but would be $1500 if it was a sale of $250,000

doc stamps- mortgage: $875

intangible tax- mortgage: $500

recording fees- $10 for first page. then $8.50 per each additional page. Lets figure 2 pages for a deed and 10 pages for the mortgage $103.50

title insurance: since you want to argue for it. $1250.00

I come up with $4228.50

Now escrows are not fees, they are escrows... how many people actually know that?

I do

Some people and I am willing to guess that this poster may be one of them get along ok with their ex's. She hasn't messed with him yet on contempt, and her concern didn't seem to be "make him do what the order says" or "so worried about my credit" it was "I can't get a mortgage because my ratios don't work" So I answered her specific question on how to make her ratios work.

well, ya see, OP came here looking for a remedy. If ex doesn't refi, OP's remedy is to seek to have the ex held to the order. That doesn't necessarily mean anybody is going to be held in contempt. In fact, it would be unlikely unless the ex refuses further orders to comply with the divorce order.

If 5000/yr was used for property taxes in this scenario (which would be low if they owed 250k) and they were due in January the tax escrow would be 4800+, 2000 in insurance say another grand paid into escrow for that.

There is 8,000.00+

taxes are irrelevant. at closing, owner would pay new escrow and be issued refund on old escrow, and that is presuming there is an escrow. I have yet to purchase a house and utilized an escrow for taxes or insurance.

Now escrows are not fees, they are escrows... how many people actually know that?

I know it but it is irrelevant to this discussion

Or we can continue to argue about if he is a BAD BAD MAN, and poster should make him comply. Which she should if thats what she wants to do, I was just reading that what she actually WANTS is to buy a home

yep, that's what she said and unless you know some foolish lenders, she is going to have to dump the existing mortgage to do that. Your letter isn't going to pay the existing mortgage if ex says: whoops, lost my job, I guess you are going to have to cover the mortgage.

and of course, your letter isn't going to mean a damn thing if OP gets sued if ex defaults.

 

[nanu156]

Ok, I read into this to mean, that OP's ex is paying the mortgage as agreed and only has 7 years left, her only concern seemed to be his death... Assuming he has 7 years left to pay and that is accurate, this implies that there is significant equity in the home.

I'm going to go with that the ex has been faithfully paying and likely paying more, but again this poster is the one who determines that.

I did not say the CC was going to be 8k, I said that the ex could have construed the escrows and per-diams as a part of the costs as MANY MANY MANY of my clients seem to do and gotten freaked out by this.

It's a refi so there is a 3 day right of rescission, then the new company will issue pay-offs, after getting payoffs the old mortgage company will close out the escrow accounts and issue refunds. It takes a couple weeks in most cases, yes I agree escrows are not really a great choice, doesn't mean that a HUGE percentage of the population chooses to escrow.

So it's not a transfer, I suppose a person with substantial assets (or not so substantial depending on ones definition of substantial and the amount of the taxes and HOI) could use their savings account and facilitate a transfer like situation.

AGAIN it all depends on the relationship between this poster and her ex, if she believes that the ex may or may not default, and how she wants to handle this.

What is this letter you speak of? No letter needs prepared in my opinion.

The poster needs to prepare these documents to supply them to the loan officer who is handling her application for a mortgage to purchase a home. As she stated that she had applied for a loan and had been turned down due to her DTI being out of whack.

I believe the CO from the Divorce would protect her in the event of his default, but that is going to be a pain in the neck, if there is a real concern that he may default on the loan then it should be refinanced. I don't see that threat reading her post above, but I have been wrong before.

 

[justalayman]

I did not say the CC was going to be 8k, I said that the ex could have construed the escrows and per-diams as a part of the costs as MANY MANY MANY of my clients seem to do and gotten freaked out by this.

fine. I don't care if the closing costs are $337,000. It is irrelevant to the issue. It is not a basis to refuse to comply with the court order.

What is this letter you speak of? No letter needs prepared in my opinion.

well, you are the one speaking of the ex somehow indemnifying the OP against claims for the mortgage. Do you think the guy talking in the phone saying: Sure, I accept all responsibility for the mortgage. Is going to be acceptable?

seriously, unless the op is removed from the existing mortgage, there isn't anything that is going to save her from owing for the mortgage short of bankruptcy.

I believe the CO from the Divorce would protect her in the event of his default

,You would be believing wrong. The court order cannot affect the mortgage since the lender was not a party to the suit. If there is a problem, the lender has all rights to seek payment from whomever is listed as being liable and that includes the OP. Then, if the OP had to shell out some cash, she could go after her ex based on the divorce order.

if there is a real concern that he may default on the loan then it should be refinanced. I don't see that threat reading her post above, but I have been wrong before.

so, you now have the FA crystal ball? While it would be great if we knew the guy wasn't going to default for any reason, that is a huge risk, especially in today's economy.

 

[nanu156]

First I said nothing about any sort of letter... I just didn't. Re-read the posts if you don't believe me.

She posted this in the mortgage section not the Divorce section. Likely because they are amicable. Yes I believe plenty of people amicably separate, yes I believe plenty of people go through this kind of thing... THIS IS WHY LENDERS have rules on what underwriting accepts for proof that a debt is to be paid by another party. BECAUSE this actually happens often enough to establish such rules. I knew these rules off the top of my head because I have dealt with it more then once.

So. AGAIN. IF OP believes the ex is not a default risk, and her post was accurate that she is upset not because she is liable for the loan, but because she can't get her own loan, then I don't really believe that going to court is all together needed.

It's been two years he remains current, he has roughly 7 years left to pay and the home is paid in full. To me that implies that the ex will likely continue to pay.

I doubt in a loan situation where there is that little left to pay that there will be a deficiency in the event that the loan goes into foreclosure. The real damage will be in the OP's credit score and the reporting of a foreclosure, again this assumes that a man who has faithfully paid on a mortgage for what was likely 23 years decides to default.

It's OP's call leave it at that. And yes I was referring to her right to bring suit against her ex.

 

[justalayman]

nanu156;3086755]First I said nothing about any sort of letter... I just didn't. Re-read the posts if you don't believe me.

I know you didn't say anything about a letter. You said this:

Have him send you proof that he is making the payments and has made them for the last 12 months, canceled checks are best, bank statements will also work.
True copy of divorce decree
and a copy of the quit claim deed.

first, the deed is irrelevant. It does nothing to alleviate the OP of the mortgage debt

same thing for the divorce decree

then, all the copies of checks proves is the ex has been making the payments. Doesn't mean he will for the next 7 years and does nothing to alleviate the OP of her obligation for the mortgage

She posted this in the mortgage section not the Divorce section. Likely because they are amicable.

she posted in the mortgage section because asking about a mortgage. If she were asking about a divorce, I suppose she would post in the divorce section.



Yes I believe plenty of people amicably separate, yes I believe plenty of people go through this kind of thing..

. THIS IS WHY LENDERS have rules on what underwriting accepts for proof that a debt is to be paid by another party.

there is a difference between liability for a debt and who is paying it at the moment.

BECAUSE this actually happens often enough to establish such rules. I knew these rules off the top of my head because I have dealt with it more then once.

The fact her ex is currently making the payments would mean nothing regarding the legal fact OP is liable for the mortgage. Can you magically make that disappear?

So. AGAIN. IF OP believes the ex is not a default risk, and her post was accurate that she is upset not because she is liable for the loan, but because she can't get her own loan, then I don't really believe that going to court is all together needed.

well, so far it has been and I suspect that a good loan officer will have already explored what you are suggesting, if it really was worth anything.


,

he has roughly 7 years left to pay and the home is paid in full.

wrong THEY have 7 years left to pay. That is the legal truth of the matter.

but for fun, lets figure you are right. OP goes and gets a mortgage. Ex loses job the next day and refuses to pay anything on the mortgage. Do you want to guess who they are going to ask next to pay the mortgage? and if it is foreclosed, I suppose that will be fine since it will only be reported on...oh wait, it will be reported on ex's AND op's credit report. Dang, that sucks.

To me that implies that the ex will likely continue to pay.

so, now good intentions can be used to pay your bills?

I doubt in a loan situation where there is that little left to pay that there will be a deficiency in the event that the loan goes into foreclosure. The real damage will be in the OP's credit score and the reporting of a foreclosure, again this assumes that a man who has faithfully paid on a mortgage for what was likely 23 years decides to default.

of course if OP has money problems you're going to jump in there and give her some money, right?

It's OP's call leave it at that. And yes I was referring to her right to bring suit against her ex.

bring suit? that was already done, about 2 years ago. What she would seek now is to have the orders from that suit enforced.

 

[nanu156]

First I didn't suggest she prep those documents to write a letter, at no point did I suggest a letter writing campaign.

I suggested she prep/collect them to give them to her LO so that she may get qualified to buy a home. Which was her initial reason for posting here. (she said her ratios were too high and as a result she had been declined financing) The mortgage company would very much like to have the QCD in hand when qualifying her for a mortgage while excluding a mortgage that appears on her credit report. It shows that she isn't paying on that debt and supports the WHY. Probably could get a strong file to closing with out the QCD but when the documents exist it helps to make a case to an underwriter for sure.

Second I know a good many crappy loan officers... How much do you know about the mortgage industry? Origination specifically... I know quite a bit... I do it... like as in every single day for a good many years... I have done it for quite a few companies.... So again, plenty of crap'tastic loan officers don't know what they should about guidelines and what will and won't fly through underwriting. Guidelines are also organic and they change.. they change quite a lot.... Just saying...

So again, my response to OP's post remains the same. If her goal is to get qualified for a MORTGAGE I told her how to do it.

If her goal is otherwise then yes as I have stated before she needs to take it back to civil court and have her DIVORCE DECREE enforced. (thats the part where I would think it goes in the divorce forum, i mean if divorce judgement enforcement was the goal of her post)

So I am posting here referencing my specific background as a loan officer who has been originating loans since 1996, licensed in 38 states. Working at a large scale national lender. Do you have additional questions about loan guidelines, how borrowers perceive closing costs, or questions that directly relate to obtaining or refinancing a new mortgage. I can certainly help you. (as a side note i posses a FL mortgage license)

AGAIN this will not alleviate her liability with this mortgage, although I am not sure that is what she is concerned with given what the OP said in her ACTUAL post, that I actually read and responded to accordingly.

There is also the potential possibility that her ex receives income that is considered non-qualifying income and as such is unable to refinance the loan at this time. Or that the ex has other extenuating circumstances that prevent his refinance. There is also the possibility that he is a butt hole. There is also the possibility that for whatever the reason the two don't want to return to court. I don't have the information necessary to determine that.

 

[justalayman]

Just so I have this straight:


You work for lenders that will knowingly ignore the fact an applicant is legally obligated for a mortgage just because somebody else has been paying it for a couple of years.


You don't care that if the current payor loses his job, dies, or just decides he doesn't want to pay that mortgage any longer, your applicant will be hounded for the payment, that she now cannot afford because you gave her another mortgage.


You, personally, were involved in real estate lending when the real estate and mortgage lending industry caused the greatest financial crisis out country has ever experienced.



Wow, I guess I see why we have so much economic strife and shouldn't be surprised when it gets worse.

as long as I understand where you are coming from, I'm ok with you telling the OP how to obtain a mortgage when she really does not qualify for it because of her existing obligations. I'm good with that.