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A Curious User
8 months ago
I am still on a mortgage with my ex-spouse, who has resided in the house that we share a mortgage on, and has paid for it solely and on time for the past 6 years. That house and mortgage are also deeded to my ex-spouse in a quitclaim deed in our divorce. With appropriate documentation, can the monthly payment of that mortgage be withheld from my DTI when I apply for an FHA loan for a house of my own?
 
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Joe Wallace
8 months ago
The answer depends greatly on the laws of your state, lender standards, and the legal status of your obligation on the original loan at the time you apply. If the lender views the arrangement mentioned in your question as a "contingent liability", the following may apply from HUD 4000.1:

"A Contingent Liability refers to a liability that may result in the obligation to repay only when a specific event occurs. For example, a contingent liability exists when an individual can be held responsible for the repayment of a debt if another legally obligated party defaults on the payment. Contingent liabilities may include Cosigner liabilities and liabilities resulting from a mortgage assumption without release of liability."

and

"The Mortgagee must include monthly payments on contingent liabilities in the calculation of the Borrower’s monthly obligations unless the Mortgagee verifies and documents that there is no possibility that the debt holder will pursue debt collection against the Borrower should the other party default or the other legally obligated party has made 12 months of timely payments."
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