Real Estate Home Mortgages/assumptions

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Question
Can a lender allow a loan to be assumed without qualifing the new owner? In my divorce I was told by my ex I could keep the house if I refinance in 36 months. If not, I was to sell it. However, a year after the divorce he was apparently contacting the bank behind my back telling them to take his name off the loan because I had won the house in our divorce. The bank contacted me and had me assume the loan with only my signature and proof of hazard insurance. Now 36 months later, my ex has found out that the bank did not remove him and he is accusing me of doing something underhanded. I have since contacted the bank and asked why they have put the loan in my name and kept him on it. They say they can. However, I called FHA and they took the info to investigate.

Answer
Hi Diane,

The bank has to work under the guidelines of whoever guarantees or buys the loan (FHA, Fannie Mae, Freddie Mac, etc.). Among other things, the guidelines specify under what conditions the loan is assumable. If it turns out that your lender did not follow the FHA guidelines, it will have to fix the situation, or else bear the consequences.

Eric
About Real Estate Home Mortgages
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here

Real Estate Home Mortgages

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Eric Forster

Expertise

Did your last mortgage broker or lender trick you into a messy situation which could cost you your home? I've been close to 30 years in the mortgage industry, and I've seen it all. Believe me, it is not pretty. As the owner of a mortgage company I am called frequently to testify as an expert witness in mortgage fraud cases and other cases where lenders did not fully disclose the terms of the loans they were offering to the borrowers. I have seen fraud being committed by borrowers - and by lenders. It's a tough world out there. And by the way - you are invited to visit my website, www.real-estate-expert-witness.net.

Experience

More than 25 years in loan production and underwriting in Southern California.

Organizations
Mortgage Bankers of America (Southern California Chapter)

Publications
Former columnist for AOL Financial Center and the author of a mortgage primer.

Education/Credentials
MBA (Finance)

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