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Nope.
IF Congress was that irresponsible, you could forever kiss goodbye to lower rates in the market.
You could expect to see mortgage rates zoom upward to cover the lenders' risks.
WAY upwards, and we aren't talking 7% or 8%.
There is no way Congress would insert themselves into banking free enterprise, dictating losses that would take our entire financial system to certain collapse.
Along with FHA & VA, I've seen some ARM loans that are assumable. Not sure if it's the exception or the rule, but I've also seen a few listings which state that the existing mortgage MAY be assumable by the buyer. The one I'm specifically thinking of was a 10/1 ARM w/ a sub 3% rate. Not the same as a FRM but not terrible.
Along with FHA & VA, I've seen some ARM loans that are assumable. Not sure if it's the exception or the rule, but I've also seen a few listings which state that the existing mortgage MAY be assumable by the buyer. The one I'm specifically thinking of was a 10/1 ARM w/ a sub 3% rate. Not the same as a FRM but not terrible.
VA and FHA are required to be assumable with certain requirements. A bank may always decide if they will allow an assumption, but they won't in this market. Why would they pay out 4-5% and then only get 3% (or less)? Bur do, always ask.
Bull crap! In the late '70's, there was a real estate boom in many parts of the US as rates crept from around 7% or 8% to around 10% or 11% or higher! The only people who think that current mortgage rates on single family homes are high are the ones who haven't been keeping track of mortgage rates for very long.
Yeah, our first mortgage was 13%. Worked out for us, house was really cheap. We refinanced when rates came down, and sold it later for 6 times original price.
There is a housing inventory shortage in this country. The elephant in the room is that anyone with 2 or 3% mortgage is not moving or selling their property, likely never. There's an article that said we now have a generation of landlords because you can't sell a house with that type of rate.
Opening up these types of loan would open up inventory, decrease housing rates, and loan officers will make more loans. I'm sure a loan officer would be open to accepting a clients 2% mortgage they have for $300k and sell a 7% mortgage on top of that for their new $800k house.
Something like this will have to be done, as interest rates will not be coming down in the foreseeable future.
Along with FHA & VA, I've seen some ARM loans that are assumable. Not sure if it's the exception or the rule, but I've also seen a few listings which state that the existing mortgage MAY be assumable by the buyer. The one I'm specifically thinking of was a 10/1 ARM w/ a sub 3% rate. Not the same as a FRM but not terrible.
An original borrower should never allow a loan assumption if they are not relieved of repayment responsibilities in case the assumer fails to pay.
Of course it does, its unlocks all the homes of people not moving due to their low interest rate. Also, depending on the region many homes are being transitioned now into rentals versus selling due to the interest rates.
Yeah, our first mortgage was 13%. Worked out for us, house was really cheap. We refinanced when rates came down, and sold it later for 6 times original price.
An original borrower should never allow a loan assumption if they are not relieved of repayment responsibilities in case the assumer fails to pay.
I agree. However, it's my understanding that many/most lenders of mortgage loans do NOT release the first buyer just because someone "assumes" their loan. All they do is simply add the second buyer to the list of the parties whom they can go after if the loan is not repaid as called for.
I've seen this situation happen a few times when someone bought a house on a loan assumption and then they stopped making payments for some reason. Then, in due time, the lender (holder of the note) foreclosed and held the FIRST buyer responsible for any shortfall that they may experience as a result of selling the house at auction.
In this type of situation, the second buyer has often trashed the house and destroyed much of the value that it once had. Also, it usually surprised the hell out of the first buyer who thought that they were through with that house and that loan when they sold it on a loan assumption. SURPRISE! They can still be held financially responsible even if it has been several years since they sold it on a loan assumption.
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They can still be held financially responsible even if it has been several years since they sold it on a loan assumption.
