Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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My wife and I are divorced and we need to sell the house.  We ow about $15K more than the house is worth at this time.  Neither me or my ex wife can afford to refinance the home.  However, my wife wants the house but she cannot afford to refi what is owed.  She may qualify for what the house is now worth.  Would there be any chance they would allow a short sale and allow my ex to purchase the house on her own?  This would get my name off the mortgage.  We can no longer afford the house plus the interest rate is getting ready to adjust and we will no longer be able to make the payments.   I know doing a short sale to someone who is currently on the mortgage is odd but if the bank were going to allow it to take place, why would they care who the buyer is.  We owe 195K on the house and the current market analysis indicate it's value at $175K.  She cannot qualify for 195K but may qualify for $175K.  She tried and the bank said that 170K was the max she could go. 

Any idea or thoughts.  This loan is with Saxon mortgage.
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.

What does your divorce attorney say?

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Our divorce was final in March of 07 and we have been living together since trying to sell the house.  It's a very difficult living situation because neither one can affor to keep it on our own so we are stuck.  We dont want our credit destroyed so we keep making the payments but I cannot keep this up and the house will not sell.  I no longer have an attorney since the divorce was final.

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Need to know a little more.  Was the lender’s approval for the $170,000.00 based on your x-wife having equity, and if so how much, or was it for 100% financing?  Don't forget closing costs.  You might want to get a commitment letter from the lender and send it, together with a well-crafted letter, to the current servicer requesting a short sale.  You might want to low-ball the offer a little to create some cushion.

The servicer more then likely knows what the property is worth and that the loan is now upside down by $15,000.00.  I wouldn’t mention what you think the house is worth unless they ask.  Who knows, their current value may even be less.
 
Yes, the borrower can suggest a short sale.

This is surely not legal advice, but I hope it helps.   

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Way To Go

Who is your servicer?

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My wife is a mortgage officer so the approval for what she would qualify was based on no equity which we do not have in the house.  It was based on her credit and what she makes and what she would qualify for.  Our lender was Saxon Mortgage. 
Any idea how a short sale would impact our credit?
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Not Batman

Hi Mike, We have 2 Mike's here now. Mike Dillon, and Mike H.

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Joe B
Mike-

     I don't know your situation, but what about this:

     You are upside down by about 15K, and your ex-wife is in the mortgage business. So, I assume your closing costs are, or could be minimal. She qualifies for around 175K, leaving the 15K unresolved.

1. Do you have 15K, or could you get access to 15K in your own name?

2. Could you two legally "sell" or transfer the house to her name, if you make up the 15K?

     This would get you off the loan, and would make up the difference between equity and loan availability. How you and your ex work out the 15K is up to you. However, I think this might work, and would certainly be better credit-wise to both your credit histories than a short sale or foreclosure!

     I think this might take a lawyers involvement, but is perhaps a consideration. You will obviously need to find access to the 15K through savings or a loan of some kind. It also involves some level of trust between you and your ex. This is a tad bit tenuous, but perhaps worthwhile if it makes sense.

     I hope I have added something positive to the discussion. Good luck!

JB

    
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Just make sure that the lender approved her at 100% LTV (Loan to Value).  Getting an approval for a maximum amount does not automatically mean they don’t want the borrower to have some equity.  That is, equity amounting to an appraised value of X percent greater then the loan amount.

Can’t tell you about the credit reporting issues regarding a short sale.  Assuming the loan was, and remains current, then I would think Saxon would report it as “Paid”.  I can’t believe that negotiating with a lender for a short sale, on a loan that is current, could in any way create a negative credit reporting issue.

Go to:  http://www.givemebackmycredit.com  Denise will know.  A good insurance policy would be to buy her book while you are there.

However, a forgiven debt, or any portion thereof, is taxable income.  Although I heard something about Washington wanting to change that wonderful little IRS provision.

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