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If a spouse is not on the loan, only the title, does their credit need to be ran?

My husband wants to [url=http://www.mortgagefit.com/refinance.html]refinance[/url] our home, but I have a bankruptcy from about 3 years ago, so I am not going on the loan, only the title. The guy he is getting a quote from said he has to run my credit in the state of Texas because we are married. However my ex-husband financed his and his wife's home the same way and her credit didn't need to be run. So what's the deal?

jstn.credit's picture
jstn.credit | Joined: February 5, 2009 12:11 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

It all depends on the creditor whether he will offer the loan in your husband's name only. If they do not agree, there is no way out except to go for another lender who will agree to lend the money in the name of your husband alone. If your credit score is considered, it will be very difficult to get the loan because your score has gone down due to bankruptcy.

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eric1's picture
eric1 | Joined: January 4, 2009 03:52 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Maybe Texas is different, but I have never seen a situation where a non borrower's credit is used.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks for the info, and I have since found out a few things. First because Texas is a community property state, some things are different. Now, the other thing is because it is a FHA loan and not a conventional loan, which is what my ex used, the FHA loan has different requirements. They require the credit to be ran for the purpose of calculating the debt to income ratio for my husband. I called the FHA first and asked them, but they were basically trying to find an answer by searching their website, which was then given to me from them and I searched myself. I tried to post the link, but could not for some reason, it is fha.gov and then click on the right to ask fha a question, then type in credit, click search, do not hit enter, won't work, go to page 2 it's post number 30. There is some pretty good information on this site.

Answer
A credit report, which complies with HUD Handbook 4155.1, Rev-5, Paragraph 2-4 is required on a non-purchasing spouse residing in a community property state or when a property to be insured is located in a community property state. A valid and reliable verified credit profile of the non-purchasing spouse must be established and their debts included in the borrower's ratio unless the lender can document, as regulated by state law, that the obligations may be excluded. Although the non-purchasing spouse's credit history is not to be considered a reason for denial, it must be obtained in order to determine the debt-to-income ratio of the borrower. If there is an indication or discrepancy regarding the non-purchasing spouse's social security number or credit status the lender, remains responsible to exhaust all possible means to resolve the issue through direct contact with the Social Security Administration, a service provider with direct access to the Social Security Administration and/or the credit reporting agency. The spouse's release to order and receive a credit report must be obtained by the lender. If the non-purchasing spouse refuses to provide authorization for the credit report, the lender would be unable to establish the borrower's liabilities, thereby making the loan uninsurable if it is not closed in accordance to FHA's rules, regulations, policies, procedures, and guidelines.

Reference
Handbook 4155.1, Section 2-2D; Mortgagee Letter 05-27;

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks for this info, can you update, did it change his %rate? or prevent him from getting the loan? My wife has no credit and we need to do the same, one lender doesn't needed it, the other does

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

we are in the same boat... my husband has near perfect credit and i am the one with the good income but have a short sale on my side before my husband and i were married..he needs my income to get a loan and i feel like no matter how hard we try no one seems to want to work with us.. We are in Michigan. any help or advice??

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi cta,

Your husband can apply for a mortgage and you can co-sign for the loan. Thus you will be liable for paying off the mortgage similar to that your husband. You should contact the local lenders and start applying for mortgages.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

for the state of florida to make the instrument which is the mortgage valid do both husband and wife need to sign the mortgage and or be on the deed to the property.

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi kj,

As far as I know, the person who is purchasing the property should be on the mortgage docs and the property deed. If both the spouses are on the property deed, then both the names will be added to the mortgage. In that way, both of you will be liable for the property and the mortgage.

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