I am going to be applying soon for a conventional mortgage. I have a Collections on my credit from years ago, from a previous marriage. I was doing some research about this and came across this on the Fannie Mae website : B3-6-05: Monthly Debt Obligations (12/16/2014) it says this: Court Ordered Assignment of Debt – When a borrower has oustanding debt that was assigned to another party by court order(such as under a divorce decree or separation agreement) and the creditor does not release the borrower from liability, the borrower has a contingent liability. The lender is not required to count this contingent liability as part of the borrower’s recurring monthly debt obligations.
The lender is not required to evaluate the payment history for the assigned debt after the effective date of assignment. The lender cannot disregard the borrower’s payment history for the debt before its assignment.
1. Am I reading this correctly? to me this sound like lender has to ignore this (collections) because of the fact that I have a divorce decree stating that this is to be paid by my ex.
2. I believe that they are allowed to look (payment history) at it before the divorce became final on 4/08 – (which if this is the case, is ok because credit was great at the time) it was from 2009-10 when he quit paying.
How To Calculate Mortgage Payments and Closing Cost.