Mortgage problems

[Anonymous]

i am in the middle of trying to get a home. I am going through Bank of America. On my prescreening, I was asked if I was married. I explained that I am common law, filled taxes together. I said that we were not married through justice peace, or preacher, and so I didnt know how to answer. We live in Texas.  the mortgage lender said thats single. It got brought up again, a few weeks later when I asked some questions about us actualy getting married before the loan went through. The house will be in my name. My fiancee has bad credit.  Advice given about looking at her credit, to get loan if we got married. The subject got brought up again, when doing final form, and again, when I asked about my fiancee signing the tax forms need to get house, since our income tax return check was in both our names. Nothing said. Now a week later, its a problem. they need run her credit to look at "our income debt ratio" in order to see about amount that "I" am approved for, "amount that I am responsible to pay for". We have been waiting on our house for a few months due to it being short sale. now three weeks before actual closing this comes up! They are looking at it like I am responsible for her debt, but will not look at her checks to see what she makes, meaning she can pay her own debt. How is that possible. its one sided. All our conversations have been on phone. Lenders states that I did not bring it up until couple days ago when I asked about signing papers reguarding our taxes. I have been upfront about this from beginging, since our pre-qual conversation. I even stated not knowing how to answer questions. If this doesnt go through due to our debt ratio being too high, is there legal proceding to go through to get my 1000.oo dollar earnest money back? Health insurance companies will not recognize us being married. How can they? How can they look at her debt, not her income, when I am responsible for loan, not her? I have excellant credit, low ratio debt. this is an FFA loan. Any help would be appreciated.

[ShanetheMortgageMan]

Bank of America pre-approval process isn't very thorough - if there is anything funky about one's situation it isn't discovered/brought to light until after an offer is made.  They don't want to waste their time reviewing people who aren't under contract.  They give a lot of "yes" answers just to get you under contract so the real review process can begin.  It's very silly.

The reason your wife's credit reports/debts are being asked is that you are very likely qualifying for an FHA loan (or VA, or USDA) and in community property states the monthly debt payments of the non-borrowing spouse are included in the borrowing spouse's debt to income ratio.  This is because you are both legally responsible for each others debts.  If you weren't married then it wouldn't be an issue.  Her income isn't considered since she isn't on the loan application.  If you aren't legally married, then your wife/fiance/etc. monthly debts on her credit report wouldn't be a factor in the application.

[Anonymous]

we have never been married through justice peace, or preacher. we are in process of getting married. My health insurance at my job will not recognize common law marriage. There fore I am unable to insure her. So, if when I fill taxes with goverment, we are married, yet not recognized with other businesses. I also take it as an insult that "its being veiwed as I lied", when I knew that it could be a potential problem on loan. I have been upfront since very begining. I now could lose 1000 earnest money, cause now its a problem. If I loose house, I want to know if there is legal proceeding to get my money back. If we are both responsible for each others debt, then both our income should be responsible for paying. Loan is mine, only in my name. So, it just depends on who it benefits, whether we married or not? So, could we get legal separation?

[ShanetheMortgageMan]

Most purchase agreements have a loan contingency where if you don't get approved by a certain date you can get your earnest money back.  Check out your contract as it'll say in there, or contact your real estate agent and he/she can go over it with you.

You would have to dissolve the marriage by divorce or some Texas recognized legal procedure.  Some lenders may have different outlooks on common law marriages not being in the same category as a legally recognized marriage, so even though Bank of America considers it this way isn't to say another wouldn't see it differently.  Since this is a Texas related question, the common law marriage that is, I recommend you check in with a Texas based mortgage lender or bank and inquire to see how they would handle it.

[BrianB_The_Loan_Professor]

The fact that you are filing taxes together says married to the bank

had your taxes been seperate then this would not have come up (my opinion)

Community propearty states are all the same

they will count the debt but to count her income she must be on the loan

no way to get around that it is the same for everyone

I would look at the contract and see what it says about a loan contingency

do you know if her debt is going to throw your ratios off?

If they are I would probably start asking what the lender thinks they can do and if it is nothing immediatly ask for a denial so you can notify the seller and work on getting that money back

I am not an atty however I doubt the bank can be held legally responsible for this

Good Luck I hope they figure something out that works for you

B

[Anonymous]

I live in Texas and i am married. My wife's credit isnt that good and the only way we got round that problem was to do a conventional with 5% down using my credit alone.

Do you have up to 5% down? if you do i would suggest going the conventional route.

[Anonymous]

Like Brian said, it all comes down to filing your taxes together. I was in the same boat. The only thing that saved me was that although we did our taxes together in 2008, I did my taxes single in 2009. The relationship was a little shaky and I didnt want to fight over the return so I filed single. At first, the loan officer said we may need to get a divorce (since we split up), this woould show she would have no stake in the property......the underwriter didnt take issue with the situation. The LO said it was because I filed single in 09. My loan was sold to WF 2 weeks after closing. The originator was a little stricter with the loan because acccording to them, WF will not buy them if they dont meet WF guidelines. I don't see how you're going to get around it......good luck...