ANSWERS: 2
  • I'm not completely sure about this but as far as I know the mortgage company continues to report the pay history to the credit bureaus, so it's "possible" that if the person who assumed the loan either was late or defaulted on the loan it could affect your credit. Can someone verify if this is correct, maybe it's possible when the loan is assumed that the mortgage company then reports the history for the new person??
  • If someone assumes your mortgage and your lender "qualifies" them and then releases you from liability, you will be OK as soon as the lender changes the name on the loan and begins reporting to the credit bureaus under that person's name. In the meantime, their payments will be reported as yours, since the credit bureaus think it is still you. Once the lender has changed the name on the account and started to report it under someone else's name, your account on the credit report will state "assumed by another party". If you let someone assume the loan without being credit qualified and the records changed, all the risk is yours. Back in the old days, FHA allowed assumptions without qualification and there could still be some of those loans around to assume. In that case, after 5 years of timely payments, you are considered "off the hook" by FHA, although the credit bureaus will continue to report according to the information they have, which could be good or bad for you. This site might be useful to you - it has mortgage information: www.2rHouse.org

Copyright 2023, Wired Ivy, LLC

Answerbag | Terms of Service | Privacy Policy