Mortgage Assumption after Mortgage Modification
by Mandy from Queens, New York and Comments by JP
Ask Kate about mortgage assumption AFTER mortgage modification: Hi Kate, After a long process, I finally got a loan modification from my nationwide bank. I am current with mortgage payments for more than 6 months since the loan mod was finalized. I was always told that after the loan modification was complete (and 2 monthly house payments) my husband would be removed from the mortgage.
Problem: The cause of my mortgage delinquency was due to a divorce. As part of the loan modification process I submitted my divorce decree, copy of my new deed (transferring ownership from my husband and I to just myself), and supporting income to show I qualify for the loan modification on my own merits.
I signed a divorce agreement, which requires me to remove my husband from the mortgage. But now, I am going in circles with my mortgage lender.
- The Loan Modification Department tells me to speak with the Loan Assumptions Department.
- The Loan Assumptions Department tells me they don't deal with loans that went through the loan modification process.
- They advise that I should call the Refinance Department to refinance.
- The Refinance Department tells me I don't qualify for refinance and must wait several years before I can qualify.
- After going back to the Loan Modification Department again I keep getting the "runaround".
Here are my questions:
- Do you have any advice how I can get my husband off my mortgage? Is there someone to contact at Fannie Mae or my bank?
- Is there a bank that will do a refinance for a loan modification case (i.e. a HARP program and not a sub-prime mortgage with exorbitant fees)
Any other suggestions?
Kate Answers: Mortgage Assumption AFTER Mortgage Modification
I actually think you are the poster child of loan assumption.
You understand removing a homeowner from title using a deed versus removing a borrower from the mortgage through assumption.This is the difference between owning a home and owing on a mortgage
, asset as opposed to liability!
Mortgage Assumption AFTER Mortgage Modification
The runaround you are receiving makes the banks look like blithering idiots.
But here is where I wonder if the ball was unwittingly dropped. Was it put in writing that you would be able to assume the mortgage after the loan modification was complete and you had made 2 monthly house payments?
Now if it looks like I am pointing my finger at you, please know this is not the case. Had you attempted to squeeze out a written agreement to follow the loan modification with a loan assumption, I truly doubt how far your transaction would have gotten.Sidebar:
The $25 billion bank settlement announced in February, 2012 was not
due to big banks' ethical and legal treatment of struggling homeowners.
But without anything in writing, homeowners simply can't rely on banks' verbal communication. Without written agreements (and without a dose of very good fortune), you may as well kiss goodbye any verbal commitments.
Mortgage Assumption Help
Now, to answer your questions... where can you turn for help. You could continue your run around the bank's circuit, hoping one phone call might land with an employee who understands the definition of accountability. But this is time consuming and frustrating.
You could ask your divorce attorney to put pressure on the bank, however I understand the cost involved might nullify this option.
How to Escalate Making Home Affordable Help
Regardless of whatever else you do, I hope you will make this call to 888-995-HOPE to speak with a HUD Counselor. It's important when you call to ask for MHA (Making Home Affordable) Help. This will escalate your case.
They are available 365 days a year and 24 hours a day to help homeowners for free, but I can only imagine they are flooded with calls. So experiment with trying to get through during off-peak hours.
Be sure to ask where to turn for help if this isn't within their scope and look at this phone call as your first step.
Refinance AFTER Mortgage Modification
Switching gears, refinancing in lieu of mortgage assumption after loan modification isn't going to be fun because of the ill-effect on your credit scores.
Banks feel they are coerced by the government into offering loan mods. So with the likelihood of reducing credit scores, they hope to give pause to homeowners contemplating HAMP.
My only suggestion is to try an FHA refinance
but you may have a waiting period due to the mortgage modification. In any event, go to How to unlock the code of FHA Loan Requirements
for more understanding of FHA.
You can find more help regarding HAMP and divorce issues at these Ask Kate letters:
Good luck and best wishes,
P.S. I hope you will keep me updated after calling the HUD counselor.
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