01/11/2012 // Florham Park , NJ, USA // lesrkramskyesq // Michelle Katz
Les R. Kramsky, Esq., the General Counsel to the Money Store, is one of the most widely recognized leaders in the mortgage, title insurance and real estate industries. In the past Mr. Kramsky has served as the General Counsel to large real estate developers, real estate agencies and title insurance companies. In addition, Kramsky has been a partner in private practice for over twenty years specializing in real estate, mortgage banking, finance, contracts, leases, labor law, corporate law as well as the general practice of law.
As a Real Estate Attorney, Kramsky is a recognized authority on mortgage, title insurance and real estate matters and has been quoted in media outlets such as The Wall Street Journal, Fox Business News, Law360, Corporate Counsel Magazine and WCBS Radio.
When a homebuyer assumes responsibility for a home seller’s existing mortgage, it is called an “assumption”. The buyer assumes all the obligations under the mortgage, just as if the loan had been made to her.
Loans insured by FHA or guaranteed by VA have always been assumable. During periods when borrowers are concerned about future rate increases, this gives them an edge.
FHA loans closed before December 14, 1989, and VA loans closed before March 1, 1988 are assumable by anyone. Buyers who assume these mortgages don’t have to meet any requirements at all, but the seller remains responsible for the mortgage if the buyer doesn’t pay unless the seller obtained a release of liability from the lender.
In a recent article published in FoxBusiness.com, Mr. Kramsky stated that “The biggest benefit of assuming a mortgage is the buyer gets the interest rate of the person selling the house. When a buyer assumes a mortgage he or she also takes over the existing mortgage balance, the monthly payment schedule along with the term of the mortgage.”
According to Kramsky, this practice was much more popular in the 1970s and 80s when interest rates were in the double digits. Back then buyers didn’t even need to go through an approval process, they just took over a mortgage, he says. However, the seller remained responsible for the mortgage if the buyer didn’t pay.
Les Kramsky: les@realestateattorneynjny.com
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