mortgage ack!

[chhotii]

Paying the mortgage is not a problem. Matt is paying enough rent to cover the monthly mortgage payment, the property taxes, the HO insurance, and the water bill, with a smidge left over to save up for the inevitable unexpected expenses.

However, there are several other problems with the mortgage. Problem #1 is that since the mortgage was qualified for based on Rich's income, the mortgage company is likely to take objection to the fact that he can't possibly be earning any more money, and call in the loan when they find that out. Another problem is that he was required under the terms of the refinance to live in the house, as his primary residence, for at least a year from the start of that loan. The fact that I switched the HO insurance on the house over to a Landlord policy is likely to tip off the mortgage company as to the fact that he failed to do that. Also, I will probably have to take Rich's name off the deed, which will probably make the mortgage company uncomfortable-- here they have given him a loan, secured by property that's now in someone else's name.

All of this spells "foreclosure" for sure. Not that foreclosure is instant doom; Susan's house has been foreclosed on, and it seems that that's just annoying more than anything else. It takes a while for them to actually take the house away.

But, anyway, I do need a new mortgage, and the sooner the better. If I take a mortgage on the condo to pay off the mortgage on the house, I believe this will have the (huge) advantage that I can deduct the interest on my taxes.

Meanwhile, I have been hearing horror stories from my mother about the absurd Kafka-esque bureaucratic nonsensical process her bank has been putting her through, and the complete idiots at the bank who are completely failing to help her through this. (I will have to call her tonight to find out whether she did actually have a closing today, and if not, what happens next.)

I'm wondering if some banks have more clueful and skillful staff than others, or if it just inevitably has to suck. At my credit union, they know me, but on the other hand as a smaller institution they seem to be sometimes kind of inexperienced and clueless.

Also wondering if I should get my credit report(s) before applying, to see if there are any surprises? Given that it does ding one's score to even check.

Advice, anyone?

Comments

[jim-p.livejournal.com]

Until and unless you actually change the name on the deed or do anything else that's a matter of public record, I doubt that the bank will call in the loan as long as you're making payments. When people lose jobs the banks don't call in the loans as long as the payments are being made... same thing here.

Re: checking your credit report: Have you shopped at Home Depot and paid by credit card this year, or anyplace else that suffered a high-profile credit breach? Home Depot and others are offering free identity protection and credit monitoring services to potential victims. This would be one way to peek in on your credit report without penalty.

As for banks: what exactly is your mother trying to do with her bank? I tried to do a HARP modification with BofA, and they put me through an incredible Kabuki dance before it all fell apart. Turns out that they went to great lengths to go through the motions of "helping people" while keeping the actual number of modifications to a minimum.

You might actually have better luck going through a mortgage broker than a bank; these guys have the incentive to make the loan happen, whereas some banks (see above) have incentives NOT to make it happen.

[deguspice.livejournal.com]

I signed up for the credit monitoring service via Home Depot. As far as I could tell all it does is send you a notification if something odd happens. I also contacted my credit card company and they said I don't need a new card, they'll let you know if anything odd happens. Thank you, but I'll continue to review my monthly credit card bills.

But I don't think it matters that the credit monitoring service doesn't show your credit report. I don't believe that checking your own report counts against your own credit rating.

[achinhibitor.livejournal.com]

some banks (see above) have incentives NOT to make it happen

I'm weak on the details, but as far as I've heard, [edit to give the meaning I intended:] it sounds like HARP was set up in a way which gave no bank an incentive to make it work. The expectable results followed.

OTOH, if you're getting a new mortgage, everybody has an incentive to make it work, regardless of whether it's a good choice for you.

The interesting question is "I have a mortgage now. Can I keep it working? Would it be to my advantage to replace it with a new mortgage?"

[deguspice.livejournal.com]

As a general practice you should take a look at your credit report a couple times a year. There are three major credit reporting companies and they each offer a free credit report every 12 months, so you can cycle through them once every four months and not pay a fee. The site to start at is www.annualcreditreport.com (sites with names like "free credit report.com" are not). If a site asks for your credit card number, it's probably trying to sell you a service that you don't need if you just want to view your credit report.

It's your credit report, so your rating is not dinged if you take a look at it.

Credit unions are usually friendly and are easy to deal with for taking out a loan. Especially if you already have an account with them.

[rmd.livejournal.com]

If you end up shopping around for mortgages, if you want a non-bank person to talk to for loans, I've used Joe Cooper over at Monument Mortgage (they're mortgage brokers) for a purchase and a couple of refinances. 617-969-1441

[surrealestate.livejournal.com]

I highly recommend the guy I have used and recommended to many clients, Jono Sexton at NE Moves Mortgage. Like Joe Cooper (who I spoke to years ago but never ended up working with personally), he's a mortgage broker. He'll answer all your questions and make sure things get done. If we had been with pretty much any bank last year instead of him, odds are quite high that we never would have been able to close due to some oddities that came up, but he was willing to go above and beyond to get it fixed. He will also talk "off-the-record", which is helpful (and again, without which we never could have made this place happen).

[I suggest calling his cell first, or emailing.]
Jono Sexton
Jono.Sexton@NEMMortgage.com
NMLS # 41145
NE Moves Mortgage, LLC
(Mass. Ave. Office) 617-864-4430
(Huron Ave. Office) 617-844-2775
(Fax) 781-663-6775
(Cell) 617-922-4088

[achinhibitor.livejournal.com]

It's not my area of expertise to be sure. But I think Jim_P is right, the bank really doesn't care as long as the payments are coming in. Actually, the bank is just paid to transfer the money from you to whoever owns the mortgage bonds and it has no interest in watching you closely. (That's one reason why they're so unhelpful if there's trouble; it's not their money at risk, so they have no motivation to try to fix the situation.) If you want a helpful bank, you need a "portfolio loan" that the bank will be keeping itself. My understanding is that these are mostly done by small banks and the interest rate is higher.

But if things get hairy, you probably want to find a lawyer that specializes in residential real estate. Especially if your situation is "I'm violating the [apparent] terms of the mortgage, will the bank notice and care?"

I'm sure that the business about income isn't relevant -- there is no ongoing income requirement for residential mortgages that I've ever heard about. And it is true that it takes the mortgage holder a long time to pry you out of a house if you're not paying.

There's also the possibility that some court decision has said that if the person who has committed to live there dies, it still counts as him living there. And if you're the executor, it may be possible to simply not change the name on the deed -- the estate is the legal continuation of Rich, and there's no rule that the estate has to be wound up in any particular length of time. If you're the only heir, there's nobody to complain that the estate is being mismanaged. But as always, real estate tends to have strange and special rules.

[tb]

My understanding of your risks are quite different. Note that people die (or lose their jobs, or change their HO terms) with unpaid mortgages all the time and their lenders do not automatically foreclose; said lenders would much prefer to get paid than be saddled with a property, especially in this market.

I think that so long as you, especially as owner, administrator of Rich's estate, and the legal representative of Rich's sole heir, continue to make the mortgage payments, the lender is highly unlikely to foreclose and may even be prohibited from doing so. However, IANAL; are the problems you've listed ones that your probate attorney (or other professional) has brought up and warned you about, or are you possibly borrowing trouble here?

I do agree that you should get a new mortgage (with better terms) anyway if you're keeping the house.

[drwex]

As I said elsewhere, and echo what tb said here: get a lawyer. The complications are complicated and although lawyers are not cheap they can be worth the money in reduced stress alone.

[skreeky]

My only advice is that after owning two different houses with mortgages and having refinanced each one to a better deal (total 4 mortgages), I have considered this sort of thing exactly zero times.

We fill out a lending tree application and play off the two best deals against each other (so-and-so is offering such-and-such, can you beat that?) until someone says "I can't beat that, take it."

We then call the real estate lawyer who Deals With Crap and Reams of Paper and tells us when and where to show up and sign our names eight bazillion times. From that point, we pretty much never speak to the lender again. Get your own lawyer - don't use the one from the lender. You will still have to put together an utterly ridiculous pack of documentation, but it's your own lawyer collecting it and making sure it's all there and nothing dumb is happening.

Aforementioned lawyer is also a good place to find out confidentially if any of this is even necessary. Lawyers don't seem nearly so evil when they're on your side.

We use Walsh&Sweeney out of Weymouth, where our excellent friend Melissa used to work. I cannot even begin to imagine doing that donkeypile of papers without Barbara or Ellen.