Here’s the question:

Sunnie asks,

“So here’s the deal. My husband and I are trying to refinance the house I owned with my ex-spouse. Salary and credit we are approved for the loan. The appraisal is fine. My husband still has a mortgage with his ex.

The decree states that she is responsible for the house payment and was due to refinance the mortgage into her name. Guess what, she chose not to refinance and put the house up for sale. Our mortgage broker said that this would not be a problem because the decree states that she is responsible, etc. and the house is for sale.

NOW, we have a different story. The mortgage broker called and said that he could not do the loan at the rate he promised us because we were not open and honest that my husband was still deeded on his former residence (hello, the broker had all the papers, etc. in his hand from the get go), but he could do the loan at a higher rate.

We are going FHA and I think something does not sound right. You can do a loan at x% yesterday, but all of the sudden your underwriter comes back and changes it to y% because my husband is still on the deed with his ex-wife. Since he had all the disclosures from the inception process, why did it change? Is the mortgage broker trying to take us for a ride to make himself more money.

Does this sound correct? Are we even going to be able to get a loan if he is still on the mortgage and deed with the ex-wife, despite the divorce decree?”

My answer:

To answer your first question, it sounds like a classic bait and switch on the refinance. They get you in by promising a rate the can’t deliver and during the process “discover” something that causes you rate to increase.

If the underwriter had an issue with your husband being on title with an ex spouse, you would just be denied. There is no higher rate for that. So, yes the broker lied about that.

For your second, here is another FHA loan question about being on title with an ex spouse and getting approved.

Thanks for the question!

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