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Collections Law/Loan assumption


QUESTION: I am on title with my ex husband on the home  I am not on the note.
I would like to assume the loan but the information I get over the phone to the call centers is that the loan is not assumable. Per Garns St Germain law in 1982, it is to my understanding that a divorce transfer is exempt from that.  I am not purchasing my own home.  I would like to at least receive the loan assumption package so that I can apply and be approved.  The home is upside down and is not a fannie or freddie loan.  I wrote a letter to the lender with hopes of having them reconsider.  I went into the Citi bank and had the manager fax it to the appropriate person and dept.
I would like to have someone negotiate with the lender on my behalf so that I can begin the application process. What options do I have in order to make this happen?
I am desperately trying to have a pending application in process before June 27/13 to show the judge that I have been trying to take my ex off the note.  My ex-husband is taking me to court in order to take me off title because I have yet to get him off the note.  I have been paying the mortgage for 5 years now.  He wants the house only in his name.
I hope that you can offer some guidance.
Thank you so much for you time!

ANSWER: Hi Jane,

Not all loans are assumable. FHA loans are assumable and most conventional loans are not. You don't need to purchase the home from yourself, all you would need to do is refinance the home in into your own name. Because you have been paying on the home for 5 years, you have equitable interest in the property and can refinance. However you are upside down on the home and therefore a new lender will not be willing to refinance you. The only way to get new financing on this property is to short the mortgage and do a short refinance. Your ex must be willing to short the mortgage. I assume that he doesn't want to do that if he wants you out. The only way for you to refi is if you bring whatever cash is needed to the table so the new note would not be upside down. It sounds like your in a tough spot. I hope that this helps.


---------- FOLLOW-UP ----------

QUESTION: Hello Brian,

Thank you so much for your answer.  However, I am very curious about what you mean by saying "short the mortgage" and do a "short refinance".  I have not heard of that term and I am eager to know more about it. Are you speaking about a short sale of the home?
Could you please let me know more about that idea.
The MSA has a stipulation/court order that my ex has to cooperate with all options and provide signatures , documents etc so that I can remove him from the note.  My situation is complex with so many layers.
I would have to explain everything during the course of five years to paint a picture of this complexity.

What kind of cash is needed?  The home was purchased at 523,000 and is estimated at being between 365,000 and 400,000. ( without an appraisal)
I am in a tough spot...but I am not willing to accept defeat.  I am emotionally attached to my home.  I do not want my ex husband and the 2nd ex wife (aka new 4th wife) to move in to my home.  My home represents stability and security.
I can afford the mortgage and would like to remain living here despite it being upside down.  I am a mature woman that does not want to be displaced.

A short refinance is  a short sale for your ex but a refinance for your new loan. It is still considered a short sale.

If you were to do a standard refinance  then you would need to bring in any extra money down to the current value so that you have at least 3.5% with an FHA loan or %5 equity with a conventional loan. If its worth $370K. then you would need to refinance about $350K. which means that you would need to bring cash to the table in the amount of $178,000 to pay down the existing mortgage.

Hope that helps.


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Brian Pitcher


I can answer all questions related to Residential Real Estate. In particular I am an expert in the loss mitigation side. I meet with multiple homeowner on a weekly basis and guide them through the issues of being upside down on their mortgage and what they can do to better it. I can answer questions on Loan Modifications, Short Sale, Foreclosure, Strategic Default, Deed in Lieu. I can also answer questions on the buyer/investor side of things in regards to homeownership or home flipping. I can also answer questions regarding the 1099C or cancellation of debt that homeowners get from a short sale or a foreclosure.


I run a team of agents called the Pitcher Group, out of Salt Lake City. We specialize in Short Sales and helping sellers get out of tough situations. We have closed over 100 short sales in the past 3 years with our team. I also am an owner of a Short Sale Negotiation company that helps process short sale transactions for Real Estate Agents all across the country. I understand the investment side of Real Estate as I have bought and sold many rental type homes over the years. I also rehabilitate homes and flip them. We usually have 1 to 3 properties going at any given time. Our completion time from bought to sold is usually less then 4 months.

I am a member of the national Association of Realtors on the national level and the Salt Lake board of Realtors on the local level. I am a member of the Short Sale Specialist Network as well as multiple short sale mastermind groups locally and nationwide.

The Short Sale Specialist Network The Truth about Short Sales, Loan Modifications and Foreclosures (an ebook that I wrote)

Bachelors Degree from the University of Utah in Spanish with an emphasis in Economics. Specialized and on going study of loss mitigation tactics revolved around the banking industry and real estate including FDIC.

Awards and Honors
Bronze Home sales award in 2008 for Keller Williams Gold Home sales award in 2009 For Keller Williams Triple Gold Home sales award in 2010 For Keller Williams Triple Gold home sales award in 2011 For Keller Williams Top Sales agent individual award in 2010 For Keller Williams I have been asked to speak and teach other realtors how to handle short sales for Keller Williams International and also at my local board of Realtors.

Past/Present Clients
I have over 100 successfully closed short sale transactions.

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