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Are there exceptions to the "owner-occupied" requirement for a loan modification?

Posted on: 01st Oct, 2009 12:34 pm
the overall goal is for a mortgage modification.
- divorced summer of 2009
- ex-wife and 3 children living in house
- mortgage is solely in ex-husbands name, however, ex-wife is on the title.
- asset is jointly owned as per agreement.
- ex-husband does sleep at house on occasion, but rents an apartment in the adjacent town.
- ex-husband owns no other property and ex-wife is not yet able to refinance or buy-out the mortgage. he is responsible for mortgage as part of the settlement.
- mortgage is less than $417k and was originated before jan 2009.
- financial hardship is due to ex-husband becoming unemployed
- current on mortgage (for now)

questions:
- is ex-husband, as the sole holder of mortgage, eligible for a loan modification if he does not reside in the home?
- should ex-husband apply for the modification directly with the lender or with some other agency?
- can ex-husband claim the mortgage interest on his taxes if it is not his primary residence?
Hi drbischoff!

Welcome to forums!

As the ex-husband's name is on the mortgage docs, he can apply for a loan modification. However, as you've mentioned that he is unemployed, it would be difficult for him to qualify for the loan modification. However, the ex-husband can definitely speak to the lender and inform him about his situation. May be the lender would consider his request. The ex-husband should directly contact the lender and apply for modification of the loan. As far as I know, he would be able to claim the mortgage interest on his taxes.

Feel free to ask if you've further queries.

Sussane
Posted on: 01st Oct, 2009 07:41 pm
Sussane - I appreciate the response. So it seems you don't feel the owner-occupied issue in this situation is a big hurdle? As far as the unemployment goes, is it possible in these cases to use personal loans or some type of co-signer until employed as a way to get around requirements issue?
Posted on: 02nd Oct, 2009 06:56 am
Hi drbischoff,

I don't think the lender would allow you to go for a co-signer in case of a loan modification. You would qualify for a loan modification depending upon your income and financial situation.

Thanks
Posted on: 02nd Oct, 2009 11:26 pm
Thats correct loan modification will help you either reduce yoru interest for some short period or increase your terms there by lowering the monlthy payment

Youcannot add one more person to the loan in loan modification process

By the way why do you want to add another person to the loan
Posted on: 03rd Oct, 2009 05:36 pm
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