All I Want to Do is Get My Mortgage In Just My Name. – Tom

“Dear Steve,

Myself and my business partner own a very nice duplex rental property in Canton, Ohio. We have also jointly owned a couple other properties together, but have recently decided to go in different directions in terms of our investing. We have sold most of the properties to get this split completed and have one lingering property to complete.

This is where the problem is…we have been very unsuccessful in selling this property. I have no problem taking full ownership of the property and mortgage, but the bank says the only way to do it is to re-finance. Both of our names are on the mortgage for this property and with the current ecomonic conditions, the loan to value on the house is about 100%. With the re-fi rules, I would need to come up with 25% of the home’s value just to essentially remove his name from the loan. I am not looking to change the rate, amount borrowed, length, payment amount, or the amount of money they will ultimately receive due to my on time payments. I just want to remove one name and pay any sort of reasonable fee associated with doing this.

How can I get the bank to even consider removing one borrower’s name without refinancing? They say this is the only way….but I have to think there is another option that they are not wanting to tell me? I can’t see what they stand to lose. I only get to talk to customer service reps or phone loan officers and I know they have no power to do anything. Can you help me?

Tom”

Dear Tom,

I have seen the banks do this before but it would involve a process somewhat like what you describe. The only time I saw a bank not do it in a refi was when the local bank requalified the remaining person for the loan in its entirety. Essentially it’s the same process, just not involving a refinance but it does require all the same paperwork and recordings.

Bottom line, a creditor is not going to let anyone off the hook unless they are confident that person and property meets their current lending guidelines. And I think that’s where you are running into trouble. It does not sound like under the current lending terms the bank would entertain a 100% financing deal so the loan does not conform. In that case, even the process of requalifying one person would run into the same issue you’ve found.

The only thing I can think of is to borrow the downpayment from a place like LendingClub.com. It’s at least worth checking out.

Please post your responses and follow-up messages to me on this in the comments section below.

Sincerly,


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

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