Home Loan Modification - Tax Return Question

by Amy

I am entering into a 90 trial period and completing the packet of paperwork the bank sent.

Here is my question:
I am on the loan solely, my husband is not. We file our taxes jointly as a married couple. My husband has gifted money in a brokerage account that I don't have access to - it is in his name solely and is shown on our joint tax return. This money has been set aside for our children's college.

Because my husband is not responsible for the loan, will the bank take the brokerage acct into consideration for approving me for the modification?

I appreciate any advice you can offer.

Mortgage Loan Modification Answer:

by Loan Modification Expert - Dan North

If you are just entering into the 90 day trial loan modification you have some time to do handlings and sort things out if needed. You are required to get all required paper work in before the end of the 90 day period as one of the requirements before your modification is made permanent. Don't wait till the last second but you do not have to get everything in this month.

I have a few questions to clarify some points. You said that your husband is not on the mortgage as a co-borrower, is he on the title or show any other ownership interest in the home (document wise)? Is the money for your children's college in a trust fund or legal structure that makes it specifically for your children's education and nothing else? Will you need your husband's income to qualify for the income level required?

If you are not using your husband's income for making monthly mortgage payments, it should not matter. Technically your lender would only figure your qualification on your income, expense and gross income.

It is somewhat arbitrary whether your lender grants the modification so there is a certain amount of human emotion that enters into the lenders decision. Does your husband make over a $1,000,000 a year? Your lender might say give me a break.

If 31% of your gross monthly income is too low your lender will require that you include more contribution from from the household for to show that you can afford the modified payment. You would need to get documentation that shows that your husband will contribute to the monthly payment if the lender requires it but you should be able to keep the college money segregated.

If you need a financial or tax adviser to review/set up a legal structure to segregate the money from you or for tax purposes you may want to check that out with a specialist.

It should not be required for the loan modification but it would be wise to check it out with a professional who specializes in those matters. You have time to check it out. They may be able to help you out in other ways even if it is not required for the loan modification.

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