Equity Home Loans

Home Equity Loan Question in Texas?

First of all, I know that I can only have liens for 80% of the value of my home. I also know that I can only take out 1 loan a year. I also know that it takes several days to close. Getting that out of the way here is my question.... I recently put in an application for a home equity loan for bank of America here in Texas. Everything was approved but they said that since my parents co signed for the house, that my parents would need to be off of the warranty deed in order to finalize the loan..... Is this true or is this just a bank of america rule??? I talked to other banks and lenders and they say that this is not true and that my parents will just have to sign some paperwork at closing basically saying that they acknowledge existance of the equity loan and share no responsibility. Thank you for your help!! People, I am not refinancing! I am doing a home equity loan! I don't want someone to call, I just want a straight answer. I am sorry but I have asked this question 5 different ways and noone seems to be able to give me an answer.

Public Comments

1. There is no way that they will have no responsibility if they remain on title they will have to sign the "mortgage" but not the "note" (terms may vary from state to state) and if a HELOC is foreclosed then they will also be named in the suit. Below are a few websites which may be beneficial to you, hope they help.
2. I don't know the answer. Sorry! The only reason I'm writing this now is to say ... BEWARE of what "the other banks" told you. Bank of America is the ONLY one who has gone through the entire loan process with you. Those others, you're just talking at a high level in very general terms. You might not even be speaking to a mortgage person! Even if you are, they are not the ones who APPROVE the loans. Your loan application is sent off the corporate, where legal AND finance go over it. Again, ONLY Bank of America has looked at YOUR situation in that level of detail. Just be careful. It will be interesting to see what others have to say. All I know is that I've been given a lot of bad information by unqualified people.
3. I'm not from Texas, but it makes sense to me. The way I see it, your parents are part owners of the house, correct? And you are trying to get a home equity loan, which is basically a loan with the house as collateral. So that means either they need to co-sign for this home equity loan, or else you have to be the only owner of the house. Either of those scenarios should suffice.
4. Actually Bank of America has an Underwriter who is requesting that your parents be quitclaimed off the warranty deed so that you are the only one responsible on the Home Equity Loan. This is to say they have approved your loan but if your parents are on the deed that they will have to submit paperwork to qualify them for the loan as well. Bank of America has strict rules that some banks don't consider and that is why we see so many people losing their homes. B of A's guidelines are there for a reason, to protect all their customers. I know for a fact that you probably are talking to loan originators, processors or even loan officers. All they see are dollar signs coming at them so they are not your best bet. The Underwriter is the one who sets conditions and who sees to it that the loan is given to qualified customers. That said, the Bank of America Underwriter does not want to put an unecessary burden on your parents or on you for that matter. Please see that this is a courtesy which is not often given. Since your parents are on the Warranty Deed, all parties need to qualify for any loans taken out since the Warranty Deed is the collateral (house).