Interesting situation

[Benito Pacheco]

Hello bigger pockets family! I need advise regarding my unique situation. I am very new to this and do not have the lingo down, so please bare with me. Let me first start with the back story, my wife and her ex-husband purchased a house in 2006 for $237K.The current amount owed on the loan is $150K. After a failed marriage my wife was awarded the house in the divorce. After we were married, we moved into the home for two years before moving out of state. Since we moved we have had renters in the home, but the current rent is not covering the monthly mortgage payment, and we are paying $250 a month out of pocket. 

The current loan is still in my wife's and her ex-husband's name. We attempted to refinance for the amount owed ($150K) so we can have the loan placed in our names and to lower our monthly payments so we can have some cash flow from the property, and were denied the loan. The thing that doesn't really make sense to me is we were denied a loan for $150K, but just purchased a home in our current town for $613K. 

What I would like to do is have the mortgage under an LLC to get it out of my wife and her ex-husbands names. Should I attempt to get financing through a bank as an LLC and "purchase" the home from my wife? Or should I get financing through a private investor, then refinance through a bank? What is the more effective/realistic avenue of approach? Is there a better way?

On a side note, the house behind this property is an REO. What I would like to do is purchase the REO and with the equity from the refinance fix and sell, or fix and rent it. I need to know if any of this is a good idea, what my options are, and how I go about making all of this happen.

Thank you,

Benito P