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Borrower on Title, Not on Note
Question:
Our client is divorced, and her ex-husband refinanced the home out of her name. Although she is still technically on title as a 10% owner, the loan was refinanced out of her name. Is she liable for any of the taxes and insurance?
Answer:
If a borrower is only on the title to a property (not the subject) and is not obligated on the note, then the expenses of that property are not required to be included in the DTI ratio calculation.
In addition, a mortgage payment history is not required when the borrower is not obligated on the note of the property for either subject or non-subject properties.
Reference: FAQs: Liability Assessment, B3-6-01, General Information on Liabilities, and B3-6-02, Debt-to-Income Ratios.