Montgomery, AL asked in Estate Planning and Probate for Alabama

Q: On a mortgage assumption, who coordinates the updating of the deed to the home? Lender or Buyer? It’s not a new mortgage

For mortgage assumption, who coordinates the closing and updating the deed when it is an assumption and not a “new loan.”

Is it the lender or does the buyer find their own closing attorney? This is for a mortgage on the home of a deceased person. The deceased was the only name on the mortgage and deed. If assumption is approved , how does deed get changed? The Will is being probated accordingly with an executor.

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1 Lawyer Answer
Nina Whitehurst
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  • Estate Planning Lawyer
  • Crossville, TN

A: The title (what you are calling the deed) is updated by the probate process. When approved by the court (usually), the executor signs a deed transferring title from the estate to the heir(s).

If this is a house, you should know that none of the heirs are obligated to assume the loan, but they do need to keep paying the loan. If monthly payments get behind, the lender can and will foreclose. But if the monthly payments are paid current, the lender cannot foreclose. Loan assumption is not required to achieve this result. Lenders do try to convince you that you have to assume the loan, but it's not true and it is illegal for them to claim that it is.

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