Legal Question in Credit and Debt Law in California

First, the Zip Code you entered with your post - 85234 - is in Gilbert, Arizona, not California. I can only speak to California law as I am not licensed in the State of Arizona. If you are seeking advice related to a property in Arizona or you live in Arizona, I suggest you repost this to Arizona attorneys.

With that said, I hate to be the bearer of bad news, but to the best of my knowledge, no lender is going to be willing to ignore the mortgage for which your husband is liable (on his mother's home) regardless of who is paying it. The question for the lender is who is legally responsible for the mortgage, and regardless of what he and his mother's intention was at the time, he remains liable until that loan is repaid through refinance, sale or payoff of the loan. If mother cannot refinance, then until the house is sold and the loan repaid, unless your husband can demonstrate sufficient income to carry both mortgages you have plus the new one for home improvements, it is not likely you will find a lender who will look beyond the fact that the loan is on his credit report, and he is legally liable for it. To further complicate matters, in this lending environment, you are not likely to find any lender willing to bend their rules - that's what started this whole mess in the first place. Best thing you can do is help mother sell her home as soon as possible, pay the loan on her home in full through that sale, then you stand a better chance of qualifying for your own loan.

As a secondary note, you need to be aware that if his mother short-sells the house she owns, then your husband may be liable to the bank for the short (the difference between the sales proceeds and what was owed).

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