Garner, NC asked in Family Law and Real Estate Law for Ohio

Q: Does Regulation Z's Ability-To-Repay Rule to Certain Situations Involving Successors-in-Interest apply to my sister?

My mother died and there is a Transfer on Death affidavit so my sister gets the house. There is still a mortgage on the house. Can my sister be added to the mortgage without having the Ability-To_Repay rule be applied? That is, can she be added without looking at her credit history? We did not file probate as all assets passed directly to my sister (life insurance beneficiary).

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1 Lawyer Answer
Bruce Martin Broyles
Bruce Martin Broyles
  • Lancaster, OH
  • Licensed in Ohio

A: Once the lender verifies that the person is a bona fide successor in interest there is not supposed to be any inquiry into the successor in interest's finances.

The CFPB issued an interpretation in 2014 stating:

the creditor's written acknowledgement of the successor as obligor is not subject to the Bureau's Ability-to-Repay Rule (ATR Rule), § 1026.43, because such a transaction does not constitute an assumption as defined by Regulation Z § 1026.20(b)

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