HARP 2.0: Requirements to remove name from mortgage?
My Freddie Mac mortgage is owned by Citi. I've checked and it is eligible for HARP 2.0 even though it's underwater. I'd like to remove my name from the mortgage and leave it only in my wife's name using HARP (also giving a better interest rate in the process). I'm being told she needs to provide 12 months of bank statements showing that she has been paying for the mortgage without any assistance. The mortgage has been paid via a joint bank account, so this is not possible. Are there any other ways to make this refi happen and still remove my name from the loan? by lydie777 from Palatine, Illinois. Apr 30th 2012
Todd Tholl (toddtholl@leader1.com)
#4 ranked lender in Iowa - 239 contributions
Lydie, If the AUS system is asking for bank statements, you must provide them. If your lender is asking for bank statements, it's probably a lender overlay & you may want to try another lender.
Larry Gray (lgray_312_247)
#597 ranked lender in California - 1,139 contributions
That was a good anwer you already received, apparently.I would take a close look at your current credit and if it is not quite good enough to do the HARP loan for the best rate...whatcan you do to improve it? Paying down all credit cards to 0 can give you FICO points (we use a tool to measure how many points youget for various combinations of effort.) At least making sure all are less than 40% owed of the maximum allow amount of debt on each card.There are letters you can mail that request you be allowed to pay off collections in return for a credit debit letter, and the letter is carefullyworded to not admit to any liability for the debt. You merely agree to pay it off to get it completely off of your credit report.I have a client who has been doing this very thing and has gotten from the low 500s to 579 so far, but is continuting to work on her credit.Most people would be the best choice on working on their credit report improvements, over paying anyone else to do so, but just don't do it.
Thanks for the response, but our credit (both mine and my wife's) is already excellent. We have no debt outside of car payments and this mortgage. I pay my credit cards in full each month and have never missed a payment on anything. Both our credit scores are around 800. I'm just looking to take my name off of this mortgage without having to invest additional principal. HARP would work, but I'm trying to figure out what the requirement is to show my wife can afford the mortgage in her own name. I don't want to have to set up a bank account in her name (only) and wait 12 months.
Larry Gray (lgray_312_247)
#597 ranked lender in California - 1,139 contributions
"...also getting a better interest rate in the process threw me off a little." Essentially, you want off the new loan and it seems there is noway to do so without your wife showing she has the qualifying income on her own. Other than remaining on the new loan together there really is no alternative, it appears.
Steve Verrier (eqfsteve)
#56 ranked lender in Florida - 21 contributions
Does your wife qualify (debt to income) on her own? I think this lender is being tight by wanting to see if she was paying it on her own. Any lender you work with should only be concerned with her ability to pay it moving forward. Not for the last 12 months. They should only be looking back to verify the payments were made on time (no more than one late in the last 12 months for HARP).
My wife would not qualify per normal debt to income ratios, but to your point, I did not think that was required for HARP. She is a teacher and makes about $48k per year and been employed at the same school for 3 years. We still owe about $234k on this mortgage, taxes are $4,700 and HOA is $265 per month. I'm a bit novice, but I think you have to factor all that into Debt ratios and I think her monthly payments will be too high. We have not missed a payment ever and own the loan from 2006. It seems like a really pointless and time consuming charade, but we can open a checking account in her name only with direct deposit from only her pay checks. She can pay all the above bills and not be late for the next 12 months. It sounds like no matter what the debt ratios are, if I did that, then in 12 months we could move forward and use HARP to take my name off this loan.We are not divorcing, so she'll still be dependent on my income. She makes enough to cover all the housing expenses for this mortgage. I can show that her income is included in the joint account that we have and that it clearly covers all housing expenses. If debt ratios are not a prequalifier for this program--then that should be good enough, right?Thanks for trying to help...this is a very frustrating process.
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
Ok Lydie.... so to touch on a few things here regarding HARP 2.0.. You are correct that this program does not address debt to income ratios.. so long as the payment is made on time, you're ok... however this is only the case if the automated desktop underwriter for Fannie Mae approves you with your high DTI... if DU does not approve you, then you won't be able to refinance... As far as removing yourself from the loan, it can only be done if the past12 monthly payments are paid out of her own funds... you would also have to remove yourself from the deed.. And she would have to qualify on her own income, and combined debt (even joint debt)... so to answer your question.. NO, NO, NO and NO... Sorry... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com
Daniel Lotter (dnllotter)
#26 ranked lender in Colorado - 58 contributions
As long as she qualifies for the loan. To bad your not in colorado - i would close your loan in 10 days
Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,848 contributions
Straight from the rule book: "Same borrowers must be on the original and new loan. Exception to this is that a Borrower may be omitted from the Note provided that they are also removed from the deed and retains no ownership interest in it. Income and assets from remaining borrower must be documented per Loan Prospector (LP) findings." So, if the AUS (automated underwriting system) is asking for 12 months of bank statements, and you can't provide them, it doesn't look like it is possible to remove yourself.
Steve Verrier (eqfsteve)
#56 ranked lender in Florida - 21 contributions
Hello again Lydie, It seems we are giving you conflicting information...To that respect I recommend you contact a reputable local mortgage broker (not bank) office that has a relationship with minimum 3-4 lenders doing HARP loans (they all have different guidelines). Any one of us would need the "whole" picture to accurately and correctly advise you. We just can't cover all the bases on this forum and we really need more information (ie. other liabilities, assets available as these would impact FNMA's DU findings. I've seen higher DTI's (60%) approved with significant assets disclosed and high FICO scores. A competent broker would be more than happy to analyze your situation to see what's available. It should probably not be the guy you already spoke to... :-)
Linda Miller (Linda Miller)
#2 ranked lender in Utah - 572 contributions
I have a client in a similar situation. It is a Fannie Mae requirement and DU asked for 12 months of bank statements. I tried everything but couldn't get it through. My borrower is making the payments from his account and we will refinance in November when he has 12 payments from his own checking account. I would contact a local Lender 411 mortgage professional and see if they have any ideas for you - and I would start having her make the payments this month. Good Luck.
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