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Assumption of Note Upon Divorce

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We have a borrower who has in recent months divorced from his wife, and had deeded the property entirely to her several months ago. The deed was originally in both names and the mortgage was therefore signed by both borrowers, but the husband was the only borrower on the note. At this point the wife would like to assume the note, as she's been making the mortgage payments herself since long before the property was transferred solely into her name. Neither borrower qualifies for a regular refinance, so an assumption seems to be the only way out of the note for the husband. What disclosures need we present to the wife along with the assumption agreement in order to complete this transaction? Do ROR, TIL, RESPA, and HOEPA apply?

The assumption by the wife in this case will be treated as a new loan and require all the current disclosures. MDIA, GFE, ETIL, HMPL, HOEPA, etc.

To get you started:
Reg Z 226.20(b) and its Commentary
Reg C (HMDA): the Commentary to 203.1(c)(9)
RESPA 3500.5(5)

First published on 4/4/11

First published on 04/04/2011

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Filed under compliance as: 

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