Posted by Brian (UT) on January 26, 2006 at 09:56:41:
John
Your right, the formal assumptions I’ve done always released the original borrower, but others I’ve seen only recast the loan and didn’t release the original borrower.
I guess we investors need to come up some new terms and catagories to use when we chit-chat.
Brian
transfer name on a mortgage. - Posted by Peyton
Posted by Peyton on January 22, 2006 at 23:31:24:
Is it possible to transfer the name on a mortgage and/or loan to another person’s name without having to actually sell the house?
And YOU’d still be on mtg & note ! - Posted by John Merchant
Posted by John Merchant on January 23, 2006 at 10:06:52:
I was almost out of law school when it dawned on me that the S’s STILL on the mortgage, even after he’s sold and the B has assumed that mortgage.
Think about it: If you held the mortgage and a note, signed by Bobby Goodbuyer, would it be fair to you to have him sell with assumption and be able to just walk away from that mortgage himself?
No way.
He’d still be on the mtg and note so if his buyer, Pete Poorcredit, didn’t pay, Bobby G would still owe you and it’d be HIS credit on line if PP defaulted.
I can’t even think of the situation where I’d be willing to sell on assumption, as I’d want to be able to stay atop those monthly payments and probably want to make them myself every month to know they’re being paid.
I would (and have) sold on “wrap”, whereby my B makes payment to me, and I continue to make payments on my note so I know it’s current.
Re: transfer name on a mortgage. - Posted by River City
Posted by River City on January 23, 2006 at 09:29:56:
You need to read your loan closing documents. These documents indicate whether or not there is a due on sale clause. Most lenders do not allow you to allow someone to assume your loan without qualifying with them first to ensure that they have the ability to make the payments in a timely manner. If your documents contain a due on sale clause and you transfer the loan to someone else without the lender’s approval, the lender may call the entire balance of the loan due and payable. I have seen many lenders do this, so tread lightly.
Re: And YOU’d still be on mtg & note ! - Posted by Brian (UT)
Posted by Brian (UT) on January 25, 2006 at 11:34:34:
John
I am one of the simple minded people out here, could you please say subject to rather then assumption. For us simple people we think assumption is formal assumption of the existing loan and the original borrower now has been released.
Brian
Assumptions - Posted by John Merchant
Posted by John Merchant on January 25, 2006 at 16:36:08:
Only kind of assumption I’ve ever seen was one in which the new buyer did have to qualify for the bank loan…BUT the original debtor/borrower was NOT released from his note to the bank.
Maybe there are banks that will release the original borrower, but never been my pleasure to deal with one of them.
“Subject to” just means a new buyer is now going to be making the note payments, but he/she is NOT formally on the bank note.
Took me a long time to catch on to ST, but I finally got it by relating it to “I’ll see you next week, subject to the roads being open and the creek not flooding.”.
Or as we used to say, inTX, “God willing & the crick don’t rise”.
Re: Assumptions - Posted by River City
Posted by River City on January 26, 2006 at 15:30:08:
If the loan is a VA loan, the original borrower can be released if the purchaser is a veteran and applies his/her Certificate of Eligibility to the loan. VA also reinstates the original borrower’s money on his C of E. In addition, FHA will release borrowers of liability as long as the new purchasers qualify with a lender on the assumption. FNMA and FHLMC also have adjustable rate loans that they will release the original purchaser of liability as long as they qualify with the lender. You probably will not find these types of programs when the lender does not sell the loans on the secondary market.