Wednesday, April 4, 2012

Assumption Agreements

The following question was asked in the comments of a blog post:

Is the assumption agreement (in the context of a mortgage) subject to approval by the lender? What if the lender doesn't approve of the grantee becoming the primary?


It's a good question. On the MBE, look for "Due on Sale" clauses which allows the lender to demand full payment of the loan if the mortgagor transfers any interest in the property without the lender's consent. So, it's not so much that the assumption agreement itself is subject to the approval of the lender, but, rather, the transfer of property can be subject to lender's approval if the lender states as such in the original agreement b/w lender and mortgagor.

No comments:

Post a Comment