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I sold my home to a buyer who paid me an amount for my

Customer Question
I sold my home...

I sold my home to a buyer who paid me an amount for my equity then assumed my low interest VA loan, but immediately sold the home to a third party but continued the assumption of my mortgage paying monthly (and simultaneously registered the property in the name of third party buyer). The mortgage company did not learn of the sale to the third party until a mortgage payment was not paid on time and I responded to a notice about delinquency. How can I get my name removed from the lien and/or avoid responsibility for this mortgage that I actually did take out.

Lawyer's Assistant: What steps have you taken so far? Have you prepared or filed any paperwork?

None.

Lawyer's Assistant: Have you talked to a VA lawyer about this?

No.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Surprisingly, I immediately after I sold the home, I applied for and received a VA loan on a home where I now reside.

Submitted: 7 months ago.Category: Real Estate Law
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Answered in 2 minutes by:
12/27/2017
Real Estate Lawyer: Attyadvisor, Attorney replied 7 months ago
Attyadvisor
Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 8,978
Experience: 30 years of experience in General Practice, Real Estate Law and Estate Law.
Verified

Welcome and thank you for your question. I will be the professional that will be assisting you.

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Real Estate Lawyer: Attyadvisor, Attorney replied 7 months ago

When the purchaser assumed the loan were you released from the assumed loan?

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Real Estate Lawyer: Attyadvisor, Attorney replied 7 months ago

Did you receive a NOVATION?

"There’s a serious issue VA loan holders should be aware of when arranging the sale of their home with a loan assumption deal. There are different types of loan assumption transactions; not all of them release the veteran from financial obligation from the loan, should the new owner default on the VA loan.

Consider what happens to your VA loan eligibility if the person who assumed your VA loan defaults and goes into foreclosure. Even though the VA will acknowledge the situation is not the original borrower’s fault, it is still impossible to get 100% VA loan eligibility restored until the loan or the VA’s loss on the deal has been repaid in full.

In the eyes of the VA, it doesn’t matter that the veteran sold the home and is theoretically no longer obligated under the original note, because the loan was assumed, the original mortgage is still in effect.

Loan assumption is not the same as refinancing, where a new contract is drawn up and signed. If the VA suffers a loss which must be repaid, eligibility will not be restored even when the loan has been assumed by another party (until it is paid).

There is one type of VA loan assumption which does relieve the original borrower from liability for the old loan.

These VA loan assumptions must include a novation, which specifically states the borrower is fully released. Some make the mistake of assuming the novation is part of the contract or agreement under the loan assumption, but a seller should specifically ask the lender if the novation is present." http://www.vanewsblog.com/2015/03/va-loan-assumption-and-the-novation/

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Real Estate Lawyer: Attyadvisor, Attorney replied 7 months ago

Are you online with me?

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Real Estate Lawyer: Attyadvisor, Attorney replied 7 months ago

If there was novation you would still be responsible on the loan. However, you may have an action against your purchaser based on that contract. Can you tell me the real property is located that is the subject of your question?

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Real Estate Lawyer: Attyadvisor, Attorney replied 7 months ago

Please do not hesitate to ask me any additional questions that you may have with regard to this matter. It would be my pleasure to continue to assist you.

If you would be kind enough to rate my service positively so I will receive credit for my work from the site I would appreciate it. A positive rating will not impact your ability to obtain a refund.

You may not be familiar with how the site works. The Attorneys to not receive credit from the site for their time or with customers unless the customer provides a positive rating. We answer your questions in good faith, hoping for a good faith response regardless of whether the law is in your favor or not. If you were unhappy with my service please let me know that you would prefer to work with another Attorney and I will opt out.

Can you see the rating scale on your end, 5 stars?

Thank you for your consideration.

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Real Estate Lawyer: Attyadvisor, Attorney replied 7 months ago

It is fine if you do not want to pay for the question. Just let me know and I will provide the contact information for customer service.

We answer the customer's questions in good faith hoping they will rate us positively so we can receive credit for our work. Our preference is for the customer to be happy with the service they received on the site.

Have a very Happy and Healthy New Year.

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