Typical Refinancing Mortgage Question

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Latest post Tue, Jul 29 2014 5:55 AM by Drew. 30 replies.
  • Fri, Jul 25 2014 11:21 AM In reply to

    • Drew
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    Re: Typical Refinancing Mortgage Question

    Forget scuttlebutt---factually she made X attempts in year one to get it refinanced and Y attempts after that --and I'd want to know X and Y and see copies of each one  

    Nice to get a free ride on somebody elses credit and risk



  • Fri, Jul 25 2014 11:32 AM In reply to

    Re: Typical Refinancing Mortgage Question

     

    Drew:

    Forget scuttlebutt---factually she made X attempts in year one to get it refinanced and Y attempts after that --and I'd want to know X and Y and see copies of each one  

    Nice to get a free ride on somebody elses credit and risk

    Of course. I think what amazes me, and this is just a vent, is that if you dislike a person so much that you refuse to have contact about financial matters such as this, wouldn;t you want the financial obligation done with? So we are really lookingat vindictiveness and knowing that she has me in a squeeze. Court it appears to be.

  • Fri, Jul 25 2014 11:41 AM In reply to

    Re: Typical Refinancing Mortgage Question

    jamesallen03:
    Lastly the ex is getting remarried and her and her spouse have a substantially large income so refinancing would logically not be an issue.

    A high income isn't enough if the home is underwater - lenders won't loan more money than the home is worth, so she would have to come up with the difference between the new loan amount and the existing loan balances in cash at closing.  Or convince the existing lenders to accept less than full payment, but of course that involves a "hit" against both your and her credit scores.  Not as bad as a foreclosure, but definitely not as good as paying the loans off in full.

    Even if her new husband has a lot of savings and can pay off the loans, he might not be willing to do that.  I know in his shoes, or in hers, I'd be hesitant to start off a new relationship on such an unequal footing.

    Two important bits of information would tell you a lot about the feasibility of a refi now:  one, what is the current market value of the home, and two, what is the highest LTV (loan to value) ratio realistically available in the home-loan market today?

    If the home is similar to many others in the neighborhood, you can figure out the fair market value yourself by looking at what similar homes have sold for in the last 6 months or so on realtor websites.  In my area, they take all but one photo off the web when a house sells, so it's best to keep an eye on the market for a few months so you can save the realtor ads with all the photos while the house is still for sale, and then take note of the selling price later after it sells.

    Be aware that the assessed value for property-tax purposes has no bearing on reality even when it's supposed to - I've been severely over- and underassessed at various times in different homes, even when the assessed value is supposed to equal fair market value (which isn't true in every state).

    As far as LTV ratios go, a good place to start your research might be bankrate.com.

     

    If your research shows the home is still underwater but is climbing in value, and you can verify that she has been making the payments on the mortgages and keeping the home insured, and that the property taxes are being paid, then pressuring her to refinance might actually have more downside than up.  You do both need to think about how to handle that balloon payment, though.

  • Fri, Jul 25 2014 12:23 PM In reply to

    Re: Typical Refinancing Mortgage Question

    karen2222:

    jamesallen03:
    Lastly the ex is getting remarried and her and her spouse have a substantially large income so refinancing would logically not be an issue.

    A high income isn't enough if the home is underwater - lenders won't loan more money than the home is worth, so she would have to come up with the difference between the new loan amount and the existing loan balances in cash at closing.  Or convince the existing lenders to accept less than full payment, but of course that involves a "hit" against both your and her credit scores.  Not as bad as a foreclosure, but definitely not as good as paying the loans off in full.

    Even if her new husband has a lot of savings and can pay off the loans, he might not be willing to do that.  I know in his shoes, or in hers, I'd be hesitant to start off a new relationship on such an unequal footing.

    Two important bits of information would tell you a lot about the feasibility of a refi now:  one, what is the current market value of the home, and two, what is the highest LTV (loan to value) ratio realistically available in the home-loan market today?

    If the home is similar to many others in the neighborhood, you can figure out the fair market value yourself by looking at what similar homes have sold for in the last 6 months or so on realtor websites.  In my area, they take all but one photo off the web when a house sells, so it's best to keep an eye on the market for a few months so you can save the realtor ads with all the photos while the house is still for sale, and then take note of the selling price later after it sells.

    Be aware that the assessed value for property-tax purposes has no bearing on reality even when it's supposed to - I've been severely over- and underassessed at various times in different homes, even when the assessed value is supposed to equal fair market value (which isn't true in every state).

    As far as LTV ratios go, a good place to start your research might be bankrate.com.

     

    If your research shows the home is still underwater but is climbing in value, and you can verify that she has been making the payments on the mortgages and keeping the home insured, and that the property taxes are being paid, then pressuring her to refinance might actually have more downside than up.  You do both need to think about how to handle that balloon payment, though.

    Thanks Karen. The key issue on pressuring her to refinance, like many posts on here, is that at present I am unable to use my credit for major purchases such as a home or vehicle. Not pulling th "it's not fair" card just trying to figure out how to create an equitable situation. She is making payments on both loans so those are taken care of though.And you are correct in pushing her could cause her to decide to default on those loans.

  • Fri, Jul 25 2014 2:30 PM In reply to

    Re: Typical Refinancing Mortgage Question

    jamesallen03:
    The key issue on pressuring her to refinance, like many posts on here, is that at present I am unable to use my credit for major purchases such as a home or vehicle.

    You sound like you think this is her fault.  But unless you gave her the cash to pay off the difference between the existing mortgages and a mortgage she could get after the divorce, and she spent it on something else, this situation is no more her fault than yours.  You both got caught in the housing boom and bust, it's as simple as that.

    jamesallen03:
    And you are correct in pushing her could cause her to decide to default on those loans.

    You sound like you think she has choices here.  You can push her as hard as you like, but if the home is underwater and she isn't sitting on a pile of money, you're wasting your time - she CAN'T refinance.  If the home's value is increasing at a rate that allows for a light at the end of the tunnel (she might be able to refinance next year or even the year after, for example), you might be smart to wait a bit more, since the only options I can see for hurrying things to a conclusion with an underwater home (and insufficient cash) are applying for a short sale or defaulting on the loans.  Both will ding your credit, and the lenders might well turn you down for a short sale anyway.

    Just curious (you don't have to answer):  Did the entirety of your divorce settlement reflect the real market value of the home at the time?  In other words, did you split the other assets lopsidedly in her favor to make up for the negative real equity you both had in the home?

    If you had it to do over again, maybe you'd both have agreed to just default on those mortgages right then and there, so you'd be giving up your chance to keep your clean credit in exchange for knowing when your time in the credit-score penalty box would be over.

     

  • Fri, Jul 25 2014 2:44 PM In reply to

    • Drew
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    Re: Typical Refinancing Mortgage Question you can use

    you can use the subpoena process to seek copies of all the loan RE FI applications she made or lack there of ...and if she failed to make more than one or two you might get judge to sanction her with all your costs and fees..as to not try is a far cry from a solid point as to impossibility to refinance.

    Some here would suggest that to deliver title wo simultaneous being off the notes is about as dumb as it gets...now that's hindsight ..but just out of curiosity who designed that step..did you cute corners  and not use counsel? 



  • Fri, Jul 25 2014 2:56 PM In reply to

    Re: Typical Refinancing Mortgage Question

    karen2222:
    If you had it to do over again, maybe you'd both have agreed to just default on those mortgages right then and there, so you'd be giving up your chance to keep your clean credit in exchange for knowing when your time in the credit-score penalty box would be over.

    On second thought, I have read horror stories about how it has taken some lenders YEARS to get around to finishing a foreclosure, leaving the homeowners liable for the property taxes, HOA dues, etc. during that time.  The unfortunate owners moved out when told to, and thought that was the end of it, but found out later that the lender then halted or suspended the foreclosure proceedings without informing them.  So even default is no guarantee of a mercifully quick end to your troubles with an underwater home.

  • Fri, Jul 25 2014 3:23 PM In reply to

    • Drew
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    Re: Typical Refinancing Mortgage Question

    Florida is a recourse state  ..which means if she rides off to Tibet with new hubby and drops all balls as to condo, YOU are left to pay it ALL as far as lender is concerned.

    you used bad judgement in beginning to convey title ahead of RE FI....I suggest you use far more active approach that just an email every 3 d month.

    so far there is no clue what is happening at her end..



  • Fri, Jul 25 2014 10:10 PM In reply to

    Re: Typical Refinancing Mortgage Question

    karen2222:

     

    Just curious (you don't have to answer):  Did the entirety of your divorce settlement reflect the real market value of the home at the time?  In other words, did you split the other assets lopsidedly in her favor to make up for the negative real equity you both had in the home?

    If you had it to do over again, maybe you'd both have agreed to just default on those mortgages right then and there, so you'd be giving up your chance to keep your clean credit in exchange for knowing when your time in the credit-score penalty box would be over.

     

    The divorce settlement pretty much gave her everything. I was one of those unfortunate morons who fought until the very end to prevent the divorce. There was also negative communication during the process. I received the divorce papers, I filed a challenge, and then I was served with a hearing date. The paperwork was all drawn up with me basically needing to sign. I was unable to use an attorney as I genuinely had zero funds to do so. Those were ramen noodles and taco bell hot sauce days. In the end all of our savings, mutual funds, and home were given to her.

    As per your question of her having a choice, she obviously has the choice to do it or not do it regardless of the circumstances. I think we can stretch this every way we can, but in the end it comes down to the fact that I really have zero recourse in this matter.

     

  • Fri, Jul 25 2014 10:14 PM In reply to

    Re: Typical Refinancing Mortgage Question you can use

    Drew:

    you can use the subpoena process to seek copies of all the loan RE FI applications she made or lack there of ...and if she failed to make more than one or two you might get judge to sanction her with all your costs and fees..as to not try is a far cry from a solid point as to impossibility to refinance.

    Some here would suggest that to deliver title wo simultaneous being off the notes is about as dumb as it gets...now that's hindsight ..but just out of curiosity who designed that step..did you cute corners  and not use counsel? 

    That was on her end during the procedures. Like I stated in repsonse to Karen's post, that three month period was one of stupidity and limited funds which meant an attorney was not available for me. She got off easy as her boyfriend is an attorney. Water under a burnt bridge and doesn't absolve me for my lack of foresight. As far as signing ove the title it was another hostage issue in which I needed tax documents in order to file in which she refused to give me. Happenstance happend that a tree fell on the home and the insurance refused to cut just her a check. So she threatened to default on the home if I didn't sign over the deed. Thus, I did like a moron.

     

  • Sat, Jul 26 2014 8:06 PM In reply to

    Re: Typical Refinancing Mortgage Question

    jamesallen03:
    In the end all of our savings, mutual funds, and home were given to her.

    jamesallen03:
    As per your question of her having a choice, she obviously has the choice to do it or not do it regardless of the circumstances.

    If the savings and mutual funds were sufficient to pay the difference between the $125k owed and whatever a new lender would have been willing to lend, and she had ongoing income sufficient to keep HER in Ramen noodles and taco bell hot sauce, then yes, she probably could have refinanced the home (unless the lenders were unreasonable, which did happen for a while there).  It wouldn't have been a good idea to use tax-advantaged retirement account money for that, since a hefty chunk of that money would have disappeared into Uncle Sam's pocket, but if the remaining amount was enough, it should have been possible.

    However, if her available assets were not sufficient, then I disagree that she had the choice to refinance.  You can apply for mortgages until the cows come home, but if you need them to lend you more money than the home is worth, that just ain't gonna happen.  During the boom they were doing that, but not before, and certainly not since.

  • Sun, Jul 27 2014 12:34 PM In reply to

    Re: Typical Refinancing Mortgage Question

    I certainly undertand what you are saying there.Unfortunately due to lack of communication there is no way of knowing. The only option is to return to court.

  • Sun, Jul 27 2014 3:12 PM In reply to

    Re: Typical Refinancing Mortgage Question

    jamesallen03:
    I certainly undertand what you are saying there.Unfortunately due to lack of communication there is no way of knowing.

    You should be able to find out the fair market value of the home on your own, and thus answer the is-it-underwater question yourself.  If the home is underwater, maybe you know her well enough to guess whether she's been growing a good nest egg she might be able to use to make a refi work.  And if her employment has been steady since before the divorce, you might also have a fair idea what her income is.

    If all the above is true, you can take your estimated numbers to a mortgage broker and find out whether it makes sense to push her now or wait.  You could also take what the mortgage broker says to your divorce attorney and ask what he or she thinks the divorce court would do if you took it back to court.

  • Mon, Jul 28 2014 2:33 PM In reply to

    • Drew
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    Re: Typical Refinancing Mortgage Question

    Hindsight being perfect--she got a major advantage via legal resources and you got boxed into some unwise  positions .

    I still guess that she failed to make a dilligent attempt to refinance place inside that one year ---now how to get access to that information and what some court is likley to do beyond a lash with a wet noodle and instruction to try "again" absent on your side , Impossibilitty for her to refinance is PROBABLY a workable excuse --but you dont know if she did try?

    Unless you have a crystall ball as to her future you may need to resign yourself to some paid help to get your options explored.



  • Mon, Jul 28 2014 6:19 PM In reply to

    • Drew
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    Re: Typical Refinancing Mortgage Question

    Impossibility if one tried a couple of times may be a defense ..but as a long shot IF she failed to even try to get it refinanced that might be contempt and that might open the door to whatever sanctions the court has in mind --and beyond the two lashes with a wet noodle she 'might" be on the hook to pay your costs of dragging her to court ..at least discuss your options with a pro?



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