[quote=SD Realtor]
Also with regards to the spouses score. So the spouses credit score is checked BUT does not have bearing on the loan. HOWEVER if the spouse is carrying debt that debt will indeed be used for the qualifying ratios for the loan.

[/quote]

So is then is the correct translation of the above scenario…

1. Husband buys first property completely in his name (qualifies with relaxed lending guidelines, factoring in any debt that spouse is carrying). Loan was completely in his name…

2. Husband does a short sell, and maybe does some damage to his credit.. Wife’s credit intact.

3. Wife now purchases home in her name, qualifies factoring in debt from her husband (which is none from the short sell since the short sale difference was forgiven).

Interesting……
Next question. What happens if you initially took out a loan as husband and wife…What would allow one spouse to take out a second loan and/or refinance.

I’m trying to figure out what my neighbor is doing. I swear the initial loan was taken out with husband+wife+relative. Then on the first refinance, it was just husband/wife. Then on the next refinance it was just the husband. Then on the next refinance and and/or second loan, i was just the wife….

Can you enlighten me on the mortgage fraud games people play, that you alluded to in your second comment?.. I’m just curious how this works.