We foolishly cosigned a mortgage loan for my daughter

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We foolishly cosigned a mortgage loan for my daughter with the agreement she would improve her credit scores and refinance the home and get it into her own name. 5 yrs later has not happened. She has kept up on pymts but credit score is not great. problem is home is underwater and we want to purchase new home. What are our options to get out from under this mortgage , she would like to walk away but with us on the mtge it is not possible.


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it is possible to use the HARP program to refinance the home she lives in provided the loan is owned by fannie/freddie and she can qualify (credit and income) for the loan herself. If she meets that criteria, you can be removed from the loan through refinancing. Also, if you can qualify with both payments – your home and her home – you can buy a new home if you wanted to.

Answered about 1 year ago

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Hi! Have you talked to the institution who holds the note and asked them if she can simply assume the mortgage? This would take you off of title and your daughter would be the sole obligator to the note. It is going to depend on the type of mortgage you currently have and your bank’s underwriting guidelines on whether or not you can do that. My only other thought is HARP or FHA and putting some money down for the refi. However it doesn’t sound like you want to put money down. I would strongly suggest reaching out to an LO at the firm that services the mortgage and asking for specific guidance.

updated about 1 year ago
Answered about 1 year ago

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IF you/your daughter is eligible for an FHA streamline or HARP loan, you shouldn’t have to put much, if any, money out for the refinance. Biggest issue will be your daughter’s scores and capacity to qualify income wise (it sounds like). To remove a borrower from an FHA loan requires proof (cancelled checks or bank statements if direct withdrawal) that the remaining borrower has made all payments in the past 6-12 months, and also requires that borrower to income qualify based on only her income. Hope that helps!

Answered about 1 year ago
Ted Rood
1091 6

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I am assuming that you have already checked to see if the loan was owned by FNMA or FHLMC. If it is and you were unable to obtain financing this could be because the financial institution you chose will only go to 105%. If this is the case you need to find a different mortgage lender, preferable one that is licensed. I have always been fond of working with Mortgage Brokers because it allows matching a client’s needs with a bank able to meet those needs.

If this is not a FNMA or FHLMC loan there is still hope. I was reading in this very publication how the President is working on what is being called HARP III. This would allow individuals who have not been late on their mortgage during the last 12 months to refinance even if their loan is not owned by FNMA, or FHLMC.

The next question is, why has your daughter been unable to raise her credit scores? Does she, and you know how credit scores are determined? Mortgage Banks use what is known as the FICO scoring model. This is completely different to what you see advertised on TV by the credit reporting agencies. It is their version of the FICO scoring model that they call the VANTAGE scoring system. In general it is much easier to obtain a high credit score using the VANTAGE model giving many the false impression their credit scores are higher than the actually are. With the internet, information on how the FICO scoring model works is readily available.

I hope this able to help.

Most Sincerely,

Steve Harkness NMLS # 140972

Answered about 1 year ago
Steve Harkness
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The very first mistake made by you was that you not certified whether the company you have refinanced with is registered or legit. Well now the situations is totally different and whatever you have planned for your daughter is not working in that way and certainly she’d sticking with the same credit score. And if you are really looking forward to get rid of that underwater mortgage, then payday loans would be a good assistance to cover up everything and clearing all your debts. It’s good to converse with your family members as well as the counselor for better look-out.

updated 7 months ago
Answered 12 months ago

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