Loan Modificatoin, Bankruptcy and Divorce

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Loan Modificatoin, Bankruptcy and Divorce

Husband and wife are both on the mortgage and the Deed. They are separating and wife has filed Chapter7 and surrendered the property. Can husband do a modification in his name only?

Mortgage Loan Modification Answer:

by Mortgage Loan Modification Expert - Dan North

Have the wife sign a Quite Claim Deed and have it recorded at the County Recorder, she would no longer have claim to the property.

The husband then can go to the lender for a modification and can get the loan restructured with out her signatures.

You can also request that her name be dropped from the mortgage, if the lender agrees they will, but they may still want to keep the wife's name on the mortgage and say no.

It is possible that the lender will want the husband to re-qualify for financing on his own before they will drop the wife's name from the mortgage or they may require that he just refinance with a new mortgage in his name only.

Having the wife's name removed from the mortgage may not be an issue at all but the Bankruptcy could require it. That is something to go over with a competent Bankruptcy Attorney before going to the Attorney that is doing the Chapter 7 for the wife.

As far as the lender is concerned a Quite Claim Deed would handle it for them.

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Loan Modificatoin, Bankruptcy and Divorce

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Me too!
by: Anonymous

I have a very similar situation to the original poster. Once the divorce was final, I asked the bank to drop her name but they wouldn't. I couldn't qualify for a refi because the home is upside down (ie, owe more than it's worth). My ex filed for bankruptcy and my 1st and 2nd mortgages were discharged. Even though I did not file for bankruptcy, every month now nearly immediately after I make each payment I get a notice from the bank telling me I have no obligation to pay, but here's the amount I must pay by the next due date or foreclosure begins. Honestly I don't have any problem paying my mortgages. But, as I stated, the home is upside down. I'm beginning to wonder if I'm stupid for continuing to pay more for this home than it's worth with the bank telling me I have no obligation to pay. Seems my options are to continue this of course. Or walking away, buying much more home for the price I'm paying now, or renegotiating a reduced principal loan with the bank. I just don't know enough to move forward and I find it difficult to trust loan modification offers. Someone attempted this a long time ago shortly after my divorce with no success because I have no obvious difficulty paying the mortgages.

Mortgage Loan Modification Answer:

by Mortgage Loan Modification Expert - Dan North

You are right about ignoring the loan modification offers, if you can afford the mortgage payments. No lender will modify if there is no financial hardship.

If your home mortgage is not too upsidedown you may qualify for HARP (Making Home Affordable Refinance Program). Upsidedown mortgages are eligible up to 125% LTV (loan-to-value).

If your LTV is greater than 125% make the bank an offer to buy the house at 20% below market value, if you can get the financing. Is worth a try.

If you can not get financing offer to short refi the home at market value with your current lender.

You may just get a YES from your lender.

You can walk away but you may want to see how the bankruptcy has affected your credit rating as that may change your options.

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