A subsequent purchaser of a property assumes the existing loan obligation of the seller.  This can allow a subsequent purchaser to obtain more favorable terms from the current loan than the market may allow from a new loan. 

As discussed in last month’s article, Maryland recently passed a law requiring lenders to allow a spouse to assume a conventional home loan upon decree of absolute divorce.  The law is specific to conventional loans. While assumptions are allowed, a lender may not always grant them in the case of an absolute divorce. Government-backed loans, such as FHA, VA, and USDA, each already have their own processes for assumptions.   

Earlier this month, U.S. House Representatives Gregory W. Meeks (D-NY) and Pete Sessions (R-TX) introduced the Mortgage Insurance Freedom Act as House Resolution 5508. The bipartisan bill seeks to require the Federal Housing Administration (“FHA”) to end the current life-of-loan requirement for borrowers to pay mortgage insurance. 

Earlier this year the Tennessee General Assembly passed HB 1127. This House Bill revises the present laws regarding advertising the sale of land to foreclose a deed of trust, mortgage, or other lien securing the payment of money or other thing of value or under judicial orders.

Updated to dynamically add "Assumption Upon Decree of Absolute Divorce" section. Page count increased to 15 pages. (Date of Release to Production: 09/30/25)

Updated to dynamically add "Assumption Upon Decree of Absolute Divorce" section. Page count increased to 14 pages. (Date of Release of Production: 09/30/25)

Updated to dynamically add "Assumption Upon Decree of Absolute Divorce" section. Page count increased to 15 pages. (Date of Release to Production: 09/30/25)

Updated to dynamically add "Assumption Upon Decree of Absolute Divorce" section. Page count increased to 14 pages. (Date of Release to Production: 09/30/25)

New Maryland form. (Date of Release to Production: 09/30/25)

Removed reference to Section 30 in second paragraph under "Incorporation of Master Form Provision" and it is now fillable.  (Date of Release to Production: 09/30/25)