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FHA Mortgage, Divorce, loan assumption and ex-husband job may ask him to relocate. need advice

Hi.Im recenrly divorced and my ex-husband is working on a loan assumption to allow me to exit the house and he will keep it. Currently, his job has him in MA several days a week and they pay for an apartment for him. He is not living there full time as his residence is still in NJ. HOWEVER, there is a concern they may ask him to move there full time. He would not be purchasing anything there, but he would then need to rent the existing house in NJ (or sell it but the market is not good for that right now)My questions are the following:If he completes the loan assumption and sometime before the 1 year FHA owner occupancy requirement he has to move to MA full time and RENT the house, would he be "covered" if the FHA came around and challenged him for renting- since he relcated for his job-and it was not "known" before hand?If he completes the loan assumption and he does NOT alert the lender to his job change and rents, what would happen? I saw in our current mortgage docs they could call the loan due in full. Is that practical in today's market?Lastly, if he had to move for his job and its less than 1 year, could he show "intent" to live there because of our current mortgage that shows hes been there since Feb 2009? (for intent purposes to show he didnt just "buy" this for an investment, but rather is assuming the loan due to divorce)?Thanks. by nomad4_177_310 from East Brunswick, New Jersey. May 3rd 2012 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 4,609 contributions

Ok.. so I read your entire question and I'm assuming that he can qualify and you can be removed from the loan.. It looks like your question is more along the lines of him possibly having to rent the property inside of the 1st year, and can that cause an issue.. so to answer those questions.. Yes.. But no... The rule is that if he rents the home out in the first year, they could call the note due.. However it is VERY, VERY UNLIKELY... the biggest concern is "are the payments being made on time"... With most lenders, if the payment is made on time, there is almost never an issue.. Especially here in these times where it's likely there will be a loss if they had to accelerate the note or foreclose. Also, he does have a strong argument that his "intent" at the time of the assumption was to live in it as his primary, and you cannot be penalized for what happens after the fact or things out of his control.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

May 3rd 2012
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Linda Wintersteen (Linda123)
#4 ranked lender in Arizona - 884 contributions

Can he qualify to buy you out of the house ??? What does your divorce say?? DEALing with FHA , CAN BE quite detailed on everything that you are trying to do.... most loan assumptions, they still need to qualify.. ARE both of your names on the deed???

May 3rd 2012
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#0 ranked lender in

What happens after the fact is out of his control. When the lender sends the employer the VOE to fill out, there is a question that asks what the likelihood of continued employment is. Just as long as they say good, and don't mention anything about a possible relocation, then you should be fine. As william says, they COULD call the note due, but in todays day and time, unless he's not making the payment on time, they really are not going to care.

May 3rd 2012
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thank you. yes he def can qualify on his own.i appreciate your answers. they are a big help.thanks!!

May 4th 2012
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Diane Dufrene (Diane Dufrene)
#8 ranked lender in New Jersey - 1 contribution

Yes, he can get an FHA loan to assume the mortgage. The house at the time he is applying is his primary residence. Single family homes are not normally rented out. His concern should be will the current market rent be enough to cover the monthly mortgage. If he wants an appraisal that includes a rent schedule please consider Diane Dufrene at DAS Appraisals.

May 4th 2012
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Bert Carpenter (BertCarpenter)
#40 ranked lender in Arizona - 1,731 contributions

The real answer lies in the statement you made: "HOWEVER, there is a concern they may ask him to move there full time." If this is just a concern that you or he has that this is something that could happen, then it is not likely to be an issue. It seems that timing is fairly critical and he should act quickly. It is fairly common for people to commute long distances for a day or two a week for their employer as a condition of employment. As long as his employment "base" is local to the home, and he has not been TOLD he is relocating full time, then FHA should not have an issue, even if the transfer occurs soon after the loan closes escrow. There is a provision in the FHA rules for people that are job transferred. Once he has been told of a transfer, then an FHA loan could become problematic. My best advice is to get it done quickly, just in case something is in the works that he has not yet been told about. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

May 4th 2012
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