Posted by John Merchant on December 03, 2008 at 20:04:07:
I’ve not heard of anybody assuming any note in a long time.
While it used to be done frequently when buyer was just stepping forward to pay what the seller had promised to pay the bank, I’d guess that fewer than 10% of all RE sales today involve any note’s assumption.
While the Seller probably thinks that he’s going to be released if Buyer assumes S’s loan, the fact is he’s NOT going to be released but will still be owing that bank.
I’ve been a party to several assumptions and can tell you that in those cases the S was thinking exactly that and was shocked to learn later that he was still on that note.
It’d be interesting today to poll bank loan officers to see how many of them really understand what happens when one of their loans is assumed. I recently was involved with a property where the S, in trying to do the “right thing” called his bank to see if his Buyer might be allowed to assume that S’s loan.
The bank said NO…so the parties had to go about their deal in another manner.