Hoping there are some professionals lingering on the forum who can offer me some help or insight.
Our scenario can be confusing:
- Filed a Chapter 7 BK and was discharged January 2012
- Did not re-affirm the 1st or 2nd mortgage on our home at the time; 1st mortgage has been current since the BK, 2nd was defaulted on in 2010, charged-off by bank and sold to a 3rd party collector, then discharged in BK, credit reports are all updated and 2nd just shows as discharged in BK, not delinquent or settled, etc.
- The above mentioned home became a rental same time of discharge, its been a rental for the past 2 years. Rental income reported on 2012 & 2013 tax returns, home as rental pays for itself and we also earn income off of it.
- My dad helped us by a new home in Carlsbad, Ca in February 2012, we used his credit to get a new mortgage and borrowed a large down payment from another family member. My husband and I were added to the title along with my dad about 1 year ago.
- With property values up significantly in our area, we want to refinance the loan, not only to remove my dad, but cash-out the large down payment to be paid back to our family member.
Purchase Price/Original Financed Amount: $643,000
Current Outstanding Loan: $403,000
Current Value: $860-$900k
Need to cash-out $250,000
Basically, we need a loan for $650K, income and DTI are in-line to qualify.
I know with FHA and new loan limits for San Diego County, we can't cash-out all the money. Spoke with a broker who has a portfolio lender that will do a 70% LTV mortgage.
Here is my question:
Can we refi if we are on title, but not on the current mortgage?
Will the unsettled second mortgage on the rental be an issue with FHA or any other lenders? I have been given conflicting answers by different mortgage brokers.
Any help or suggestions would be greatly appreciated!
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