Need Her Off The Mortgage!

[ToofDoc]

OK, asking for someone else we'll refer as "Joe".

Situation is as follows:

Joe was dating Jan and got engaged and they're in Michigan. Joe had his own house when he met Jan. Joe then sold his house he lived in and made $150K profit out of the sell. 

Joe and Jan then bought a house for $300K together with both of their names on the deed. Joe used his $150K profit form his old house towards the $300K new house and Jan (ONLY Jan) obtained a conventional mortgage for the remainder $150K for the new house. Deed in both names, but mortgage is only under Jan's.

After one month of moving in together, Jan broke up with Joe and moved out. They striked up a written agreement with the following terms:

- Joe will continue to pay for the mortgage to keep Jan's mortgage in good status so Joe can keep & remain in the $300K house

- In return for Jan to allow Joe to keep her mortgage and keep the $300K house, Joe agreed to provide a free BMW SUV Jan to drive and Jan takes all of the new furniture ($5K worth) they bought to move into the new house for her new place

- Jan agreed to not receive or claim any equity to the $300K house since Joe put in $150K in the beginning and he now is the only one paying for the mortgage payments

Three years of peace later, Jan inform Joe that she is moving to Florida and want her name off the mortgage or don't want a mortgage in her name remain active. She told Joe that he has 45 days to figure it out.

Facts about Joe:

Joe is self employed with no W2s

Joe has active IRS back taxes in payment plan

Joe's credit is around 660-680

Joe has about $10K in savings

Joe can't show docs, credit not stellar, no money to buy Jan out, and the only thing he has is $150K equity in the property.

What are Joe's options to get out of this situation to get Jan's name off that existing mortgage?

[FicoMike0]

Sounds pretty fishy.

Joe had reported income, hence the back taxes.

Joe is now hiding income, to avoid taxes or other judgements. 

Joe is not getting a mortgage based on hidden income.

Joe needs to borrow from loanshark to pay off jans mortgage or,

Joe and Jan need to sell their house.

[FlaDude]

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@FicoMike0 wrote:

Joe needs to borrow from loanshark to pay off jans mortgage or,

Joe and Jan need to sell their house.

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So what is Jan going to do if Joe doesn't get the mortgage out of her name? If Joe wanted to make things difficult for Jan, he could let some payments become late (or threaten to). Jan could file a partition lawsuit to force a sale of the property, but that will take a lot longer than 45 days to get the judgement, sell, and close.

I agree with @FicoMike0 that if Joe wants to get Jan's name off the mortgage, he needs to come up with some way to pay it off, whether get one in his name (doubtful), borrow money from somewhere (family maybe), or sell.

[FicoMike0]

I agree Jan has a problem too. Her credit is at risk. The agreement the two have is in question as well. 

[ShanetheMortgageMan]

For self-employed individuals there are alternative income documentation loans that will calculate the qualifying amount of income based on business income deposits on bank statements, a CPA prepared P&L or 1099's.  If that doesn't come up with enough income there are no income/no employment loan programs, they have minimum FICO requirements which the lowest I'm aware of is a 660.  Outside of that, Joe doesn't have a lot of options and may need to sell.

[pizzadude]

If this story is real, and if they actually wrote up a contract then Joe can just keep paying as he is now, as Jan is trying to get out of their agreement.   There's nothing negative happening to her as a result of having the mortgage open and the only reasoning given as to why Jan wants out of their deal is that she's moving.  

They striked up a written agreement with the following terms:

- Joe will continue to pay for the mortgage to keep Jan's mortgage in good status so Joe can keep & remain in the $300K house

[FlaDude]

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@pizzadude wrote:

There's nothing negative happening to her as a result of having the mortgage open and the only reasoning given as to why Jan wants out of their deal is that she's moving.

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It's not in the post, but since Jan is moving, maybe she wants to buy a house and the existing mortgage that she is responsible for is affecting her DTI. I agree though that if the written agreement (contract?) is well written, she might be stuck. Depending on what it says, she could try for a partition lawsuit to force a sale. Whether she prevails would probably depend on how well the agreement was worded.

[pizzadude]

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@FlaDude wrote:

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@pizzadude wrote:

There's nothing negative happening to her as a result of having the mortgage open and the only reasoning given as to why Jan wants out of their deal is that she's moving.

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It's not in the post, but since Jan is moving, maybe she wants to buy a house and the existing mortgage that she is responsible for is affecting her DTI. I agree though that if the written agreement (contract?) is well written, she might be stuck. Depending on what it says, she could try for a partition lawsuit to force a sale. Whether she prevails would probably depend on how well the agreement was worded.

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That might be the case -- but they could probably get around this by having Joe sign a lease if their existing contract wouldn't be sufficient to prove that Joe is paying for that house.  

[FlaDude]

Personally if I were Jan, I'd be having Joe make the payments to me so I could make sure the mortgage payments are made on time.