Legal Question in Real Estate Law in California
prequalify and refinance issues
My husband bought a home for my brother because he and his wife couldn't qualify on their own. Now that we are trying to purchase a house we cannot qualify or refinance on our current home because we have my brother's home under my husband's name. My brother pays for the house directly to the lender and he gets all the tax benefits as well. Can we prove to the bank that we don't have any financial obligation with my brother's house so that we can remove it as part of our debt and improve the chances of qualifying for a new home?
2 Answers from Attorneys
Re: prequalify and refinance issues
Only if the bank will allow your brother to take over the financial responsibility of the loan. Otherwise, it will remain on your husband's (and your) credit reports until paid.
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Re: prequalify and refinance issues
Can you prove to the bank you committed bank fraud? Sure you can, if you made any false statements on that application as to who was the real purchaser. If you were actually truthful and not at risk now, you still have no way of solving your problem other than selling that house or paying off the mortgage, or getting that bank to let your brother assume the loan. That's unlikely, since he didn't qualify to start with. But, if he now has improved his credit and income enough to qualify, you could give it a try.
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