Questions about Mortgage assignment

2 Replies

Hello PB community!! I️ have a property under contract for a flip and the seller agrees to “cooperate in the necessary steps to assigning the mortgage,” my attorney emailed me late last night so I️ wanted to have a few questions answered before I️ spoke with him again. Will I️ need to speak with a mortgage broker so I️ can assume the mortgage? Also I️n layman’s terms. Can anyone explain the process of assigning the mortgage? Thanks for all the support!!

Assignment is something usually done when a lender purchases a portfolio of loans from another bank. The new bank is the now the mortgagee with all original terms remaining the same. They are now in the same lien position as the the original. The mortgagor is still bound to make the payments as if nothing happened.

When you assume a mortgage, you know step in place of the borrower and now you are the one sending the check! You are also now responsible to all terms or risk losing the collateral. Not many lenders allow assumption btw. Read the mortgage docs. I heard a VA loan may still be assumable. It's been a while since I have done that.

So assignment means you are the bank. Assumption means you are the borrower. Hope this helps.

AS @Michael Knaus   stated your confusing terminology.  A mortgage assignment happens when a mortgage is bought and sold.

if your talking an assumption.. IE your taking over existing debt then as stated that is called an assumption.. which can happen but most lenders are pretty tough to get those to happen..

you can take title sub too but that creates a whole nother set of circumstances and things you need to be cognizant of.

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