What Happens to Your Mortgage in a Divorce, Money, option one mortgage.#Option #one #mortgage

What Happens to Your Mortgage in a Divorce?

Divorce is a messy and emotional situation, and it can wreak havoc on your finances. One of the major assets that couples share is their home mortgage. Handling your mortgage correctly in the divorce will help you and your ex go your separate ways on the right foot financially.

1. Selling Is Often the Best Option

Your best option is usually to sell your home. This is easiest done if you have equity in the house, and the house can be sold and the profit split. Emotionally, selling will not always be the easiest, especially if you raised your children in that home or have other fond memories. From a financial and logical standpoint, selling the home and splitting the profit is the cleanest way to deal with the mortgage.

2. Decide if One Spouse Can Take Over the House Payments

If one spouse wants to keep the home, then they can refinance the home under their own name. In order to do this, they will need to qualify for the refinance with just their income.

It is not wise or advised to trust that your ex will make the mortgage payments. Even if your name s not on the deed, as far as the mortgage company is concerned, you and your ex spouse are both fully liable for the mortgage costs each month. Therefore, if your ex misses a payment, or if something happens to them, such as disability or death, you will still be held accountable for the payments.

Even if your ex is the most trustworthy person, having your name tied to that mortgage loan means that you will not be able to get another mortgage unless you have enough income to qualify for another mortgage. It might even prevent you from getting a place to rent, since many landlords want to be sure you have enough income to pay for the rental.

3. Should You Sign a Quitclaim Deed?

A quitclaim deed is a legal way to transfer interest of real property. Signing this deed means the person is forfeiting their claim and right to the property. Signing this deed in divorce gives the other party full rights to the home, but your name still remains on the mortgage. You will still be held accountable for any missed mortgage payments and your credit score will be affected.

Remember, the deed and mortgage are two different things, and the quitclaim deed cannot remove your name or responsibility from the mortgage.

Another important thing to know about quitclaim deeds is that if you sign one, you are forfeiting the right to sell and profit from your home sale. For example, say you sign a quitclaim deed because your ex wants to pay the mortgage, but cannot afford to refinance. Now that your name is off the deed of the home, your ex can sell or refinance the house any time and will not owe you anything.

4. When You Can t Afford to Sell

While selling the home is the cleanest solution, things get complicated when more is owed on the mortgage than the house is worth. Couples that cannot afford to sell the home during the divorce can try one of these three options.

Short Sell the Home

A short sale is a home sale in which the mortgage lender agrees to accept less than the full value of the property and cancel the debt. A short sale will negatively impact your credit score and it can have tax implications, as the debt cancellation offered by the lender is viewed by the IRS as income. (Note that a law passed in 2007, and subsequently extended through 2016, exempts debt cancellation income.)

Rent the Home

If both you and your ex can agree on renting the home out for a period of time, then you can delay the sale of your house until you have more equity. Renting does buy you time and prevents a short sale, but renting comes with a host of responsibilities which you ll share with your ex.

Continue to Live Together

This option is for only a select few couples who can live peacefully under the same roof. While the situation is not ideal, it can save both parties money, since it allows them to wait until the house market goes up.

5. What to Do When Things Get Complicated

Divorce can bring out the worst in people, and many times, an ex spouse will not be willing to sell the home or some other issue. This is why it is important to consult with a divorce attorney. A divorce attorney can help you understand your legal rights when it comes to the mortgage and protect you from doing something unwise.

It is a good idea not to finalize the divorce until your mortgage issues are settled. Be prepared to get court orders to make your ex remove your name off of the mortgage through selling or refinancing.

No one buys a house with their spouse with intent on getting a divorce. Unfortunately, these things happen. It is best to protect yourself and your assets by making decisions based on logic rather than emotions.

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About Group One Mortgage

Option one mortgageAt Group One Mortgage we are a fully licensed mortgage lender. As a lender we are able to offer in-house underwriting and virtually every program and product available to you such as fixed, adjustable and interest only programs, FHA/VA, USDA, jumbo, no closing costs, first time homebuyer programs and many more.

Our team has been together for many years and strives to make the mortgage process a memorable and pleasurable experience for our customers. We realize financing a home is one of the most important transactions people make in their lifetime. The customer’s wants, needs and concerns are our number one priority. We truly enjoy helping people get into the home of their dreams.

Our Mission

Option one mortgageAt Group One Mortgage, it’s our mission to be the premier mortgage lender in the areas in which we operate. With particular attention focused on each individual customer’s needs to result in complete customer satisfaction and help them achieve their financial and personal goals efficiently.

With appreciation and respect for our employees, whose individual skills and competency create the teamwork to make it possible to achieve excellence in the financial market.

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    Lending guidelines sure have gotten tougher over the past year. Lenders are requiring more and more documentation than ever before! As a result, we at First Lenders Mortgage thought it would be a good idea to provide an “UPDATED” list of what is required by banks when applying for a mortgage! You most likely DID NOT have to provide some of these the last time you applied for a loan. These are Fannie Mae and Freddie Mac guidelines and apply to all lenders!

  • Pay-Option Arm Mortgages, The Truth About, first option mortgage.#First #option #mortgage

    Option Arm Mortgages

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    The option arm loan program was one of the most popular mortgage choices for borrowers in the United States during the lead up to the mortgage crisis thanks to its forgiving payment flexibility.

    This same payment flexibility also made it one of the most scrutinized loan programs in history because of its misleading ability to qualify borrowers for a home they truly couldn t afford.

    It was offered by some of the biggest former mortgage lenders, including Countrywide Mortgage and Washington Mutual, both of which failed during the Great Recession. I believe Bear Stearns also offered the product. They also failed.

    What Is An Option Arm?

    The option arm, or pick-a-pay mortgage, is a monthly adjustable rate mortgage tied to one of the major mortgage indexes, including the LIBOR, MTA, or COFI. The program allows a borrower to pay off their loan balance using four payment options, including the following:

    15 year term payment (Principal and interest)

    30 year term payment (Principal and interest)

    Interest-only payment (Usually available first 10 years)

    Minimum monthly payment (Negative amortization payment)

    In other words, borrowers can make the standard 30-year fixed payment, an accelerated 15-year fixed payment, a 30-year interest-only payment, or a negative amortization payment.

    That last option was what got a lot of homeowners into a lot of trouble. It allowed homeowners to pay less than the total amount of interest due, thereby pushing many borrowers into an underwater position.

    Most Option Arm Holders Make the Minimum Payment

    Most borrowers select the option arm for the minimum payment option, otherwise known as the negative amortization option. The minimum payment option allows a borrower to pay monthly mortgage payments that are significantly less than the actual interest rate.

    The minimum payment on most option arm programs is 1% fully amortized. It seems like a great deal, but every time the borrower elects to makes the minimum payment, the difference between the minimum payment and the interest-only payment is tacked onto the balance of the loan.

    A borrower can pay the minimum payment until the loan balance reaches 110-115% of the original loan balance, depending upon the rules of the issuing bank or mortgage lender. This allows the typical borrower to pay the minimum payment for roughly the first five years of the life of the loan.

    After the borrower reaches 110-115% of the original loan balance (110-115 LTV), they will lose the minimum payment option, leaving them with the three remaining payment options. After ten years from the start of the loan, the interest-only option typically goes away as well, and the borrower must pay using one of the two remaining payment options.

    Typical option arm programs do not have any caps aside from the lifetime cap of say 9.95%, and the minimum payment generally increases 7.5% each year until it is no longer an available option.

    You re Deferring Interest with an Option Arm

    What many borrowers may not understand is that paying the minimum payment each month is simply a way of deferring interest, not avoiding it altogether. By making the minimum payment each month, the accrued interest eventually stacks up against the borrower, while effectively building zero home equity.

    And after five years of paying the minimum payment, the borrower would have a loan balance above their original balance without the flexibility of the minimum payment option.

    This makes the option arm a dangerous choice for homeowners, as once the minimum payment option disappears the borrower has no choice but to pay the interest-only payment. And many borrowers will likely have trouble making the interest-only payment after relying on a much lower minimum payment during earlier years.

    The only saving grace to this program is housing appreciation and leverage. While the market was hot, real estate investors were using option-arms to keep cash in their pockets, banking on appreciation until they resold the home years, or even months later.

    But once every one and their mother was using this type of loan, trouble started brewing. It probably should have never been introduced to the masses.

    1 Month LIBOR index: 5.330

    Fully indexed rate: 7.980%

    Loan amount: $400,000

    15 year term payment (Principal and interest) = $3,817.99

    30 year term payment (Principal and interest) = $2,929.48

    Interest-only payment (Usually available first 10 years) = $2,660.00

    Minimum monthly payment (Neg-am payment) = $1,286.56

    Minimum monthly payment Year 1 = $1,286.56

    Minimum monthly payment Year 2 = $1,383.05

    Minimum monthly payment Year 3 = $1,486.78

    Minimum monthly payment Year 4 = $1,598.29

    Minimum monthly payment Year 5 = $1,718.16

    Typical five-year interest-only adjustable rate mortgage at 6.75% is $2,250.00.

    Monthly savings making the minimum payment = $963.44

    As you can see, the minimum payment is dramatically lower than the interest-only payment, but it won t be around forever. And the minimum payment increases each year, as well as the accrued interest.

    I ve seen a lot of lender commercials lately offering option-arm programs under the guise of names such as Super-Saver program and Smart Option . They tend to highlight the benefits, mainly the cost savings without mentioning the negative implications.

    The newest option arm program now is the so-called assured option arm , also known as a five-year fixed option arm mortgage. It combines the safety of a five-year fixed product with the flexibility of an option arm. It can be useful for the same reasons I mentioned above, with the security of a fixed interest rate for a small time period. But it s still a risky loan product, and one that should be approached cautiously as well.

    All that said, the option arm program definitely has the potential to save homeowners money, and keep money in their pocket during hard times, but it should be approached cautiously.

    A loan officer or mortgage broker may recommend the option arm program as a way to keep your payments down, but if you don t feel you can make the interest-only payments in the future, and eventually the much higher fully amortized payment, it s probably best that you look for something more conventional.

    If you can t make the fully amortized payment, you don t really qualify for the home loan. Bottomline.

    Option Arms Banned Post-Crisis

    In early 2014, the Consumer Financial Protection Bureau (CFPB) enacted the Qualified Mortgage (QM) rule, which required lenders to stop making mortgages with what they referred to as harmful loan features.

    One of these features turned out to be negative amortization, meaning the option arm as we knew it was a thing of the past. Lenders get certain legal protections if they make loans that abide by the QM rule, and as such most loans are now QM loans.

    However, it s still possible for a lender to offer a similar product in the future, but it s doubtful because they ll be assuming more risk. And we all know these are risky loans.

    In summary, the option arm will go down in history as one of the most infamous loan programs of all time. One could easily argue that they did a lot more harm than good, and were probably one of the main reasons everything fell apart.

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    First Option Mortgage Indiana

    Indianapolis’ Number One Mortgage Lender

    First Option Mortgage of Indianapolis provides Indiana mortgage services in many Indiana communities and cities throughout the state. Whether you live in a large metro area like Indianapolis or a subdivision in one of the suburban communities, we have Indiana mortgages that can suit your needs and we can tailor them to the requirements of Indiana law and regulations. Because we have a mortgage office in Indianapolis with lenders that know your unique needs, we can serve you directly with local Indiana mortgage professionals.

    The First Option Mortgage Indiana branch office is located in Indianapolis, the 12th largest city in the U.S. and also considered to one of our country’s most livable cities. With people drawn from all over the globe, Indianapolis is a diverse, bustling metropolis.

    We can grab a bite to eat at notable restaurants, entertain the kids at The Children’s Museum of Indianapolis or the Indianapolis Zoo, or treat ourselves to some endless indoor shopping at Circle Centre. And we can’t forget about the sports! Indianapolis is home to the Colts, the Indiana Pacers, and the famous Indianapolis Motor Speedway, which hosts the Indianapolis 500. When we want some fresh air, we have more than 200 parks to explore.

    First Option is proud to serve Indianapolis, and every city and small town in the Indiana borders, and even across the borders in to other surrounding states.

    Our experienced mortgage lenders are well versed in Indiana codes and requirements. They can tailor your mortgage to them so you don’t have to waste time on extensive research. Being native to Indiana allows our team to show you the ins and outs of Indianapolis and make state-specific mortgage recommendations.

    Our Indianapolis branch president is Jared Vinup. Jared has been a member of the First Option team for eight years and prides himself on being a strong leader, a loving father, and devoted husband. He works with his team to provide clients with the lowest rates and a streamlined home buying process. Our Indianapolis branch is looking forward to working with you and your family.

    First Option Mortgage – Awful company, Review 132377 #mortgage #rates.com

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    First Option Mortgage

    Awful company

    First Option Mortgage RAISED our fees at closing with NO notification or authorization. We were told by Josh Fitzwater to close the loan and he would see what he could do.

    In the beginning we were told we would have fees of $2, 600. All fees and schedules were listed in all the documentation that we signed. How ever the day we were to close we were asked to resign documents with higher fees totaling over $8, 000. This company tried to tell us they were a good company that they were not a broker and that they are a bank. So we felt like we made a good decision. I should have known when we went in to the appointment at 8888 Keystone Crossing, Ste. 900 Indianapolis, IN 46240 that we were about to be taken advantage of. I have closed on several loans in my 20 years of home ownership and I was not about to let them do this to me and my family.

    We never ended up closing on this loan at First Option Mortgage. I would suggest if anyone decides to refinance or buy a home to consult with your local bank or credit union. BANKS AND CREDIT UNIONS DO NOT CHANGE FEES AT CLOSING. Further more I found out First Option Mortgage is a Broker according to the Secretary of the State here in Indiana. They wasted our time and money that we paid for an appraisal out of our own pocket. The appraisal First Option Mortgage had done we could not use because our home was over appraised by them by over $10, 000 and the bank said they could not use it. If we would not have listened to the loan officer from First Option Mortgage and just went with our bank it would have been the much better choice.

    I am very thankful we did not close on that loan.

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    Option One Mortgage Corp

    January 1, 2008 | From Times Wire Services

    Former H
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    Option One Mortgage – Option One Online #greentree #mortgage

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    Option One Online / Payment Options

    Option One Online is a great place for Option One Mortgage customers to get all sorts of information about their mortgage account, as well as perform tasks such as making a payment and contacting customer service.

    Potential customers who are in the market can also use the Option One Mortgage website to learn more about the company and what it has to offer.

    Option One Mortgage knows that today s consumer is busier than ever before. With hectic schedules now being the norm for most consumers, rather than the exception, no one has time to get everything done without some serious multitasking.

    That is why Option One Mortgage offers its customers flexible payment options that fit every need and level of technical comfort. Tech savvy customers can pay online with ease and convenience. Those who are more comfortable with the old fashioned method can pay via regular United States mail using a check, money order or cashier s check. Note: It is advised to never send cash in the mail.

    For even more convenience, customers can set up an automatic payment that will be deducted from an account of their choice each month. This makes worrying about getting your payment in on time a thing of the past. All the customer needs to do is record the payment in their transaction register at the appropriate time each month.

    For last minute emergencies when you need to get a payment in right away, customers can use Western Union to wire their payment, with their loan number, and it will arrive the same day. There is a fee for this service.

    Providing choices that fit for every customer is just one of the ways Option One Mortgage makes customer service a top priority.

    Option One Mortgage to Shut Down #refinance #home #mortgage #rates

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    Option One Mortgage to Shut Down

    An agreement by H R Block to sell its ailing mortgage unit Option One to Cerberus Capital Management has been severed, according to both parties involved.

    Both companies called the termination “fully amicable”, though Option One will wind down operations as a result.

    H R Block will lay off approximately 620 employees, close three offices, and take a $75 million restructuring charge.

    Option One will no longer accept loan applications, but will continue to service the existing pipeline totaling about $30 million, most of which are government-backed loans (FHA loans. VA loans ).

    The defunct mortgage lender also plans to sell its valuable servicing portfolio.

    Both parties said they had tried to find a way to save the deal originally conceived in April, but couldn’t find a mutually acceptable agreement.

    The mortgage market today has undergone vast changes since last April when the original Cerberus deal was signed, H R Block Chairman Richard Breeden said in a statement.

    Despite the hard work and good faith of both sides we could not find a way to restructure the original transaction to mutual satisfaction.

    Two weeks ago, H R Block president and CEO Mark Ernst resigned as the prospect of selling its money-losing subprime mortgage unit looked increasingly bleak.

    The proposed sale of Option One to private equity firm Cerberus Capital for $800 million (formerly $1 billion) agreed upon earlier this year was largely expected to fizzle as the credit markets continued to breed uncertainty.

    Cerberus already backed out of a deal to buy Affiliated Computer Services Inc. and is currently attempting to withdraw its offer for United Rental.

    According to National Mortgage News. Option One made $29.8 billion in subprime loans last year.

    Shares of H R Block were down 5 cents, or 0.26%, to $19.41 in midday trading on Wall Street.

    Check out the latest list of closed lenders. mortgage layoffs mergers, and rumors.