Loan assumption

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Post Posted: Tue Feb 23, 2010 2:31 pm    Post subject: Loan assumption

I am looking for assistance regarding a loan assumption requested by a mortgage servicing company.
My aunt, who lives in Florida, is a co-borrower on a loan. She signed the loan agreement with her husband who is now deceased. She has been struggling to pay her mortgage for the past two years and is now 5-6 months behind on payments.
The mortgage servicing company is requiring that she assume the loan before they can offer a loan modification. While the loan modification is not a guarantee, she does not understand why she must assume the loan if she is a co-borrower.
The servicing company sent her a Beneficiary Statement that identifies her deceased husband as the borrower. My aunt is concerned that she not listed as a coborrower on the Beneficiary Statement. She is afraid to sign the loan assumption paperwork at this point and doesn’t understand why a death certificate would not be sufficient.

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Icon Mini Profile jenkin7

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Post Posted: Tue Feb 23, 2010 11:34 pm    Post subject:

Hi Jackie,

If your aunt signed the mortgage note as a co-borrower, she is responsible for the repayment of the loan. Since her husband is deceased, she is now the only one liable to pay off the loan. An assumption will help her remove her deceased husband's name from the loan. But since she is already behind on the mortgage and finding it difficult to make the payments, I don't think it will help her much if she assumes the mortgage. However, if she assumes the mortgage and the lender modifies the term of the loan, it can help her get current on the loan.
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