Question about foreclosure

[DownAndOut]

I have a home that costs me way too much a month. I bought it with my old perfect credit file now ruined. I was approved to buy any home I wanted with a no incom no asset mortgage meaning they don't care about anything but a score and a down payment.

My wife now has perfect credit. She is not on the note but is on the deed.

Anyone know if I get her off the deed with an attorney involved, will they only foreclose on me. The mortgage company has never reported any thing on her credit for 2 years, only mine, however I'm afraid if we lose this home the courthouse will report a foreclosure on me and my wife if she is still on deed at the time of foreclosure.

Does that make any sense?

Thanks.

[virtualpara]

Sorry to hear about your situation. I didn't research any particulars in CA, but the NOTE is the promise to pay back the $ (ie, promissory note). The DEED legally "ties" the Note to the property to hold it as collateral. So that if the NOTE is "called due", they can take the HOUSE back as collateral.

As I surmise, since your wife is NOT on the NOTE, her credit should remain intact. Also, you can always deed 1/3 (or whatever) of your property interest to another and they are NOT on the NOTE and would not sufferer any credit report consequences. Might just lose "equity" if house is foreclosed.

You might need to SELL that house ASAP, take whatever equity you have get another home you feel comfortable with on payment. OR, maybe your wife can refiance to a lower payment. . . .?

[DownAndOut]

I believe if they sue in my local courthouse than both of us will be sued. A judgement will be entered against us both and some third party credit reporting agency will send it off to the CRA's.

Can someone please verify if this is true.

If we have her removed from the deed, then I believe they would only have to sue me to foreclose.

Thanks

[firstsource]

For your piece of mind, go to a CA Real Estate Attny, and have him do the documents to quit claim or warrenty deed her off of the deed, back to you.

A foreclosure is just the legal way that lenders call the note due,and you either have to pay, or they sell the property to get as much money as they can to satisfy the note.

One other reason that you should try to market the property, is that IRS has been known to treat the amount of "short sale" as income to you. In other words, The difference between the note and the sale is 10K. You have gotten 10K financial benefit from the deal, and that is taxable. Does not happen all the time for some reason, but it CAN happen.

Charles

BTW: Here is a great example of abusing the system. Stated income loans, like this one was, are for a number of reasons, ie, Both people can not be on the loan, perhaps because of one of their credit problems, but both incomes are used to make the payments, then it is OK to state the total income as being the borrowers. Self Employement. After all the tax deductions not much money is shown as profit, but part of the reduction of income is for things that are normal type living expense, ie cars/meals on the road/etc, so again, in reality, use the actual real income, not the tax income.

If these are abused, ie income is way overstated from reality, then credit is ruined, home is foreclosed on, and everyone else in the market suffers. Why? If the lender has too many deals where they loose money, they have to raise their general rates, or go out of the business.

[DownAndOut]

this was not a stated loan it was a NINA no income no asset, they didn't ask a thing about how much I made or how much money I had.

It was honestly a credit score and 5% down. At that time my scores were very high.

I would not have done a stated loan as it would have required me to lie and commit a crime.

It was a don't ask don't tell mortgage.

[DownAndOut]

Please tell me what u mean by CA, does that mean California or collection agent or something else?

[virtualpara]

California -- CA

[DownAndOut]

I am in Florida what do you mean by California