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marvincarlos · Joined: 27 Mar 2009 Posts: 4 3.12 Dollars($)

Hi. I am very upset at my lender. I am the original borrower on the loan and my son wanted me to add him to my mortgage just a few months ago so he can improve his credit. However, it did not work and he was recently married and wants out of the liability.

GMAC is now saying that to reverse this procedure, I have to pay $125 to start the process and $900 to close!!

Adding him was simple and free!! What is going on with this corruption? This is so unfair. HE VOLUNTARILY added himself and was not part of the original loan. We can not refinance because we are underwater but overall, he should not be trapped in a 1-way contract! They never told us this would be a problem. He does not have a job nor does he have good credit but now they have him trapped to the mortgage!

I need legal advice please!

Niicss · Posted: Fri Mar 27, 2009 3:38 am Post subject:

Hi marvincarlos

I guess that the lender added your son to the mortgage with the help of novation. But as you are reversing the process, may be the lender wants you to refinance the mortgage and thus charging you the amount. I think you should speak to the lender and clear off the whole issue. In my opinion it is not a corruption.

Thanks.

marvincarlos · Joined: 27 Mar 2009 Posts: 4 3.12 Dollars($)

Hi there.. i don't think its a refinance because they said I either pay the $900 plus $125 app fee OR refinance the loan.. I don't see how come they can't reverse a novation when my son wasn't even on the loan to begin with. He's stuck unless we pay the fee OR refinance...

any ideas?

savior70 · Posted: Fri Mar 27, 2009 5:33 am Post subject:

Hi

I think the options you have to refinance are either to do a refinance in your name or do a novation replacing your son from the mortgage. I'm not sure whether there's any other way to release him from mortgage liability. However, you can consult an attorney and see if he can come up with any legal solution to this issue.

gmakerley · Posted: Fri Mar 27, 2009 7:41 am Post subject:

the lender did you a favor and now you wish them to reverse it. honestly, i think you and your son should have given considerable more thought to this whole procedure in the first place.

this only took place "a few months ago" according to what you wrote. did your son not know that he was going to be married in the near future when he decided it was necessary to "improve" his credit by obligating himself on your mortgage? that's a little far-fetched, but that's simply my opinion.

i don't think gmac is worthy of scorn in this matter.

marvincarlos · Joined: 27 Mar 2009 Posts: 4 3.12 Dollars($)

I just don't understand their reasoning behind charging to remove and they did not even charge a single thing to add him... usually with other creditors, its easy to add an authorized coborrower and remove them easily as well...

are all lenders like this??

gmakerley · Posted: Sat Mar 28, 2009 4:25 am Post subject:

marvin, can you cite some examples of "other creditors" with whom it is "easy to add an authorized coborrower and remove them easily as well" please?

it's news to me.

Guest

i was referring to non-mortgage creditors, such as my chase and bofa credit cards. this is the first time ive ever encountered this with a lender so i guess it has to do with the formality of procedure (cost to execute new deed, investor approval, etc..).. im just surprised that it didn't cost a thing when we added him.. i don't see how can they just not reverse back to where it was a few months ago. they didn't even run my son's credit or income to add him.. nor did they give us any warning that reversing this procedure would have such a hefty fee.. seems more like a convenience to the bank to trap another person to go after..

gmakerley · Posted: Mon Mar 30, 2009 6:23 am Post subject:

i understand the reference now...thanks, marvin.

i doubt very highly that the lender would have anticipated that you'd go back and request a reversal of the process; hence their inability to quote you any fees in advance. they're probably a little exasperated - though i wouldn't say that's any rationale for charging fees.

why they wouldn't run credit is a mystery. is this a national lender, or a local firm?

Guest

okay, so I get their so called "assumption package" and it seems pretty much a refinance.. my financial circumstances have changed significantly so im already feeling they're going to pass this through an underwriter and leave my son on the hook... it was our ignorance to think that this was similar to a credit card "authorized user addition"... boy were we wrong.. it just seems that the laws are created with a 1-way trap in mind.. bottom line, we should've at least be warned of the repurcsions of adding him... he never signed loan docs, the note, the deed, etc.. so how else were we suppose to even think he was going to be trapped? stupid corporate policy that they think "is the law"... id have to hire an attorney to take this to court.. becuase I am trying to see if we have a case since this seems like a "simple assumption" and now they want a formal assumption to get out. They never credit/income qualified my son to be added which justifies the meaning of simple assumption (in which i hold the ultimate liability) and he shouuld be able to get out simply by novation.. BTW, I looked up the Fannie Mae Release of ASsumption form and we don't recall filling out that form.. he signed GMAC's version of "Assumption of Liability" form.. Also, we are not sure if our Fannie Mae loan was assumable to begin with.. and if it is, it says in the "joint assignees and transfers" section that any coborrower who does not execute the note is not obligated to the sums of the security instrument.. we misplaced the agreement they made and we are hoping its not a contract that says "by signing this, you are obligated to the original note".. hopefully this gets rejected and that we should've signed a new note which would have only been fair in a formal qualifying assumption.. but obviously they claim it was a formal assumption when they added him but disquise it as a simple assumption... very misleading!

Posted: Tue Apr 14, 2009 12:54 pm Post subject:

well i'm really gratified that you've done as much homework on this as you have. you brought up a very good point about the fannie mae mortgage's assumability. virtually all of fannie mae loans are not assumable, so it would be quite unusual, i think, to find that this particular one was.

it's incredible that they would have gone ahead with whatever it is they did (i sure don't get it) without giving you full disclosure. and i don't mean disclosures as required by law, but simply the kind of information that you'd like to have to allow you to make a reasonable choice.

i'll respectfully disagree with your statement about laws created "with a 1-way trap in mind," but i also figure your statement is somewhat "heat of the moment," and, therefore, understandable.

check with the regulatory agency on this procedure they put you through - if you feel you've been wronged (and you do), they will happily step in to investigate and adjudicate the situation. that'll presumably save you legal fees.

gmakerley · Posted: Tue Apr 14, 2009 12:55 pm Post subject:

well i'm really gratified that you've done as much homework on this as you have. you brought up a very good point about the fannie mae mortgage's assumability. virtually all of fannie mae loans are not assumable, so it would be quite unusual, i think, to find that this particular one was.

it's incredible that they would have gone ahead with whatever it is they did (i sure don't get it) without giving you full disclosure. and i don't mean disclosures as required by law, but simply the kind of information that you'd like to have to allow you to make a reasonable choice.

i'll respectfully disagree with your statement about laws created "with a 1-way trap in mind," but i also figure your statement is somewhat "heat of the moment," and, therefore, understandable.

check with the regulatory agency on this procedure they put you through - if you feel you've been wronged (and you do), they will happily step in to investigate and adjudicate the situation. that'll presumably save you legal fees.

me again, not signing in!

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Added son to my mortgage and now lender refuses to remove