What we verified in “How to remove a co-borrower from a mortgage”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, divorce changes the relationship between spouses but does not automatically change their relationship with creditors; a creditor can still collect from anyone whose name appears as a borrower on the loan; you are generally responsible for a debt unless the creditor contractually released you or your former spouse refinanced the loan and removed your name; taking your name off the home's title does not take your name off the mortgage; and sending creditors a copy of your divorce decree does not end your responsibility on a joint account.

   Sources 1 · Can a debt collector contact me about a debt after a divorce? (last reviewed Apr 14, 2023): 'Divorce changes the relationship between spouses, but it doesn’t automatically change their relationship with creditors'; 'a creditor can still collect from anyone whose name appears as a borrower on the loan or debt'; 'you are generally responsible for a debt unless you were contractually released by the creditor or your former spouse refinanced the loan and removed your name'; 'taking your name off a home or vehicle title doesn’t take your name off the mortgage or auto loan'; 'sending creditors a copy of your divorce decree doesn’t end your responsibility on a joint account' · Checked October 29, 2026

2. Under Regulation Z, an assumption occurs when a creditor expressly agrees in writing with a subsequent consumer to accept that consumer as a primary obligor on an existing residential mortgage transaction; before the assumption occurs, the creditor must make new disclosures to the subsequent consumer based on the remaining obligation.

   Sources 2 · 12 CFR §1026.20(b): 'An assumption occurs when a creditor expressly agrees in writing with a subsequent consumer to accept that consumer as a primary obligor on an existing residential mortgage transaction'; 'Before the assumption occurs, the creditor shall make new disclosures to the subsequent consumer, based on the remaining obligation' · Checked October 29, 2026

3. Under the federal Garn-St Germain Act, a due-on-sale clause is the contract provision that lets a lender declare the debt due if the property is sold or transferred without its consent; for a loan secured by residential property with fewer than five dwelling units, a lender may not exercise that clause upon a transfer by devise, descent or operation of law on the death of a joint tenant or tenant by the entirety; a transfer to a relative resulting from the death of a borrower; a transfer where the borrower's spouse or children become owners; or a transfer resulting from a decree of dissolution of marriage, a legal separation agreement or an incidental property settlement agreement by which the borrower's spouse becomes an owner.

   Sources 3 · 12 U.S.C. §1701j-3(a)(1) and (d)(3), (5), (6) and (7): 'a contract provision which authorizes a lender, at its option, to declare due and payable sums secured by the'; 'With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units'; 'a lender may not exercise its option pursuant to a due-on-sale clause upon'; 'a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety'; 'a transfer to a relative resulting from the death of a borrower'; 'a transfer where the spouse or children of the borrower become an owner of the property'; 'a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property' · Checked October 29, 2026

4. Under Regulation X, a successor in interest is a person who receives from a borrower an ownership interest in the property securing the loan through certain transfers, including a transfer to a relative resulting from the death of a borrower, one where the borrower's spouse or children become owners, and one resulting from a decree of dissolution of marriage, a legal separation agreement or an incidental property settlement agreement by which the borrower's spouse becomes an owner; and a confirmed successor in interest is one whose identity and ownership interest the servicer has confirmed.

   Sources 4 · 12 CFR §1024.31: 'Successor in interest means a person to whom an ownership interest in a property securing a mortgage loan subject to this subpart is transferred from a borrower'; 'A transfer to a relative resulting from the death of a borrower'; 'A transfer where the spouse or children of the borrower become an owner of the property'; 'A transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property'; 'Confirmed successor in interest means a successor in interest once a servicer has confirmed the successor in interest' · Checked October 29, 2026

5. Under Regulation X, a confirmed successor in interest is considered a borrower for purposes of section 1024.17 (escrow accounts) and the mortgage servicing rules in that subpart.

   Sources 5 · 12 CFR §1024.30(d): 'A confirmed successor in interest shall be considered a borrower for purposes of' · Checked October 29, 2026

6. Under Regulation X, when a person sends a written request indicating they may be a successor in interest, with the name of the borrower they received the property from and information to identify the account, the servicer must respond with a written description of the documents it reasonably requires to confirm their identity and ownership interest, and contact information including a telephone number.

   Sources 6 · 12 CFR §1024.36(i)(1): 'any written request from a person that indicates that the person may be a successor in interest'; 'includes the name of the transferor borrower'; 'a servicer shall respond by providing the potential successor in interest with a written description of the documents the servicer reasonably requires to confirm the person'; 'contact information, including a telephone number, for further assistance' · Checked October 29, 2026

7. Under Regulation X, a servicer must have policies so that, on learning of a borrower's death or a transfer of the property, it promptly facilitates communication with potential successors; promptly tells them which documents it needs to confirm them; and, once it receives the documents, promptly decides and tells them whether it has confirmed them, needs more documents, or has determined they are not a successor.

   Sources 7 · 12 CFR §1024.38(b)(1)(vi)(A)–(C): 'Upon receiving notice of the death of a borrower or of any transfer of the property securing a mortgage loan, promptly facilitate communication with any potential or confirmed successors in interest regarding the property'; 'promptly provide to the potential successor in interest a description of those documents'; 'promptly make a confirmation determination and promptly notify the person' · Checked October 29, 2026

8. According to the CFPB, successor homeowners have a right to continue making the mortgage payments, get information about the loan and be evaluated for a loan modification without assuming liability for the loan or refinancing; to modify the loan or remove the original borrower's name, they do not generally need to refinance, provided they are willing to assume liability and can pass the investor's underwriting criteria for assumptions; and if they want the original borrower released from liability, as courts often order in divorces, they will generally need to assume liability for the mortgage after meeting the lender's or investor's underwriting standards.

   Sources 8 · Issue Spotlight (Dec 17, 2024), 'Background' and 'Servicers often pressure homeowners to refinance': 'Successor homeowners have a right to continue making the mortgage payments, get information about the loan, and even be evaluated for a loan modification without either assuming liability for the loan or refinancing'; 'homeowners do not generally need to refinance to do so, provided they are willing to assume liability on the loan and can pass the investor’s underwriting criteria for assumptions'; 'If the homeowner wants to have the original borrower released from liability on the mortgage, as courts often order in divorces, the homeowner will generally need to assume liability for the mortgage after meeting the lender or investor’s underwriting standards' · Checked October 29, 2026

9. According to the CFPB, homeowners report being incorrectly told that they must refinance the loan at today's higher interest rates; many report waiting months or even years for servicers to process their requests; and the CFPB says that homeowners who get the runaround or experience pressure to refinance an existing mortgage on their home should file a complaint with the CFPB.

   Sources 8 · Issue Spotlight (Dec 17, 2024), 'Consumer Risks' and closing: 'Homeowners report being incorrectly told that they must refinance the loan at today’s higher interest rates'; 'Many homeowners report waiting months or even years for servicers to process their requests'; 'Homeowners who get the runaround or experience pressure to refinance an existing mortgage on their home should file a complaint with the CFPB' · Checked October 29, 2026

10. According to the Fannie Mae Selling Guide, a transaction in which one owner buys out the interest of another owner (for example, as a result of a divorce settlement or dissolution of a domestic partnership) is considered a limited cash-out refinance if the property was jointly owned for at least 12 months before the new loan's disbursement; all parties must sign a written agreement stating the terms of the transfer and where the proceeds go; at least one borrower on the new loan must be an owner on title at the time of application, with exceptions, for example when the borrower was legally awarded the property in a divorce or separation; and buying out a co-owner pursuant to an agreement is acceptable in that kind of refinance.

    Sources 9 · Selling Guide B2-1.3-02 (10/08/2025), 'Refinances to Buy Out An Owner’s Interest' and requirements: 'A transaction that requires one owner to buy out the interest of another owner (for example, as a result of a divorce settlement or dissolution of a domestic partnership) is considered a limited cash-out refinance if the secured property was jointly owned for at least 12 months preceding the disbursement date of the new mortgage loan'; 'All parties must sign a written agreement that states the terms of the property transfer and the proposed disposition of the proceeds from the refinance transaction'; 'At least one borrower on the new loan must be an owner (on title) of the subject property at the time of the initial application'; 'the borrower acquired the property through an inheritance or was legally awarded the property (such as through a divorce, separation, or dissolution of a domestic partnership)'; 'buying out a co-owner pursuant to an agreement' · Checked October 29, 2026

11. According to HUD Handbook 4000.1, all FHA-insured mortgages are assumable, and anyone assuming an FHA mortgage must have a valid Social Security number or EIN, or meet the eligibility exception regarding Social Security numbers.

    Sources 10 · Handbook 4000.1, III.A.3.b.i 'Assumability of FHA-Insured Mortgages': 'All FHA-insured Mortgages are assumable'; 'Anyone assuming an FHA-insured Mortgage must have a valid SSN or EIN or meet the eligibility requirement exception regarding social security numbers' · Checked October 29, 2026

12. According to HUD Handbook 4000.1, an assumption is the transfer of an existing mortgage obligation from the existing borrower to the assuming borrower; the lender must notify HUD within 15 days of any change of borrower, but that notification does not formally release the original borrower from personal liability for the note; to release them, the lender must prepare form HUD-92210.1, Approval of Purchaser and Release of Seller, when the original owner sells by assumption to someone who signs an agreement to assume the mortgage and pay the debt.

    Sources 10 · Handbook 4000.1, II.A.8.n.i and iv: 'Assumption refers to the transfer of an existing mortgage obligation from an existing Borrower to the assuming Borrower'; 'within 15 Days of any change of Borrower'; 'This notification does not formally release the original Borrower from personal liability for the mortgage Note'; 'The Mortgagee must prepare form HUD-92210.1, Approval of Purchaser and Release of Seller, thereby releasing the original owner when they sell by assumption to the assuming Borrower who executes an agreement to assume the Mortgage and to pay the debt' · Checked October 29, 2026

13. According to HUD Handbook 4000.1, if the original mortgage closed on or after December 15, 1989, the assuming borrower must intend to occupy the property as a principal residence or HUD-approved secondary residence.

    Sources 10 · Handbook 4000.1, II.A.8.n.ii 'Occupancy Eligibility Requirements': 'If the original Mortgage was closed on or after December 15, 1989, the assuming Borrower must intend to occupy the Property as a Principal Residence or HUD-approved Secondary Residence' · Checked October 29, 2026

14. According to HUD Handbook 4000.1, assuming borrowers must be underwritten, except that the lender may process an assumption without credit review if the transfer is by devise or descent, or other circumstances in which the transfer cannot legally lead to exercise of the due-on-sale clause, such as a divorce in which the party remaining on title retains occupancy, and the assuming borrower can show they made the mortgage payments for at least six months before applying for the assumption; the assuming borrower is not required to make a cash investment; and the lender may not use the automated TOTAL scorecard, so the underwriter must review the assumption manually.

    Sources 10 · Handbook 4000.1, II.A.8.n.v: 'Assuming Borrowers must be underwritten in accordance with Origination through'; 'The Mortgagee may process an assumption without credit review of the assuming Borrower if the transfer is by devise or descent, or other circumstances in which the transfer cannot legally lead to exercise of the due-on-sale, such as a divorce in which the party remaining on title retains occupancy, and the assuming Borrower can demonstrate that they have made the Mortgage Payments for a minimum of six months prior to the date of application of the assumption'; 'The assuming Borrower is not required to make a cash investment in the Property'; 'The TOTAL Mortgage Scorecard must not be used for assumptions. The DE underwriter must manually underwrite the assumption' · Checked October 29, 2026

15. According to HUD Handbook 4000.1, the lender may charge the assuming borrower a reasonable and customary processing fee not to exceed $1,800; and if the mortgage is not assumed, it must refund half the fee when the assumptor's credit was approved but the assumption did not occur for reasons beyond their control.

    Sources 10 · Handbook 4000.1, II.A.8.n.vi(A) and III.A.3.b.iii(B): 'Mortgagees may charge the assuming Borrower a processing fee that is reasonable and customary not to exceed a maximum of $1,800'; 'In the event a Mortgage is not assumed, Mortgagees must refund one-half of its processing fees if the assumptor’s credit is approved, but assumption does not occur for reasons beyond the control of the assumptor' · Checked October 29, 2026

16. According to HUD Handbook 4000.1, the lender may not accelerate (call the whole balance of) an FHA mortgage for an assumption when the transfer is by devise or descent, with or without a will; if an assumed mortgage goes into default, it must not report that default to consumer reporting agencies for former borrowers, whether or not they remain liable for the debt; and it must notify borrowers who remain liable that the assumed mortgage is in default.

    Sources 10 · Handbook 4000.1, III.A.3.b.vii(B) and ix: 'The Mortgagee may not accelerate for the assumptions when'; 'the transfer is by devise or descent (with or without a will)'; 'If an assumed Mortgage goes into Default, the Mortgagee must not report these Defaults to consumer reporting agencies for former Borrowers, whether those Borrowers remain legally liable for the mortgage debt or have been released from liability'; 'The Mortgagee must notify any Borrowers that remain liable for the mortgage debt that the assumed Mortgage is in Default' · Checked October 29, 2026

17. Under the federal VA loan statute, if the person transferring a property with a VA loan notifies the loan holder in writing before the transfer, and the holder determines that the loan is current and the purchaser is obligated by contract to assume full liability for the unpaid balance and qualifies from a credit standpoint, the application for assumption is approved and the transferor is relieved of all further liability to VA on the loan, including for any default by the purchaser; if it is not approved, the holder must notify the transferor that they may appeal to VA; if the person transfers without notice, the holder may demand immediate and full payment; and the loan documents must say the loan is not assumable without the approval of VA or its authorized agent.

    Sources 11 · 38 U.S.C. §3714(a)(1), (a)(3), (b) and (d): 'notifies the holder of the loan in writing before the property is disposed of'; 'shall be relieved of all further liability to the Secretary with respect to the loan (including liability for any loss resulting from any default of the purchaser or any subsequent owner of the property) and the application for assumption shall be approved if the holder determines that'; 'the loan is current'; 'is obligated by contract to purchase such property and to assume full liability for the repayment of the balance of the loan remaining unpaid'; 'qualifies from a credit standpoint'; 'notify the transferor that the transferor may appeal the determination to the Secretary'; 'fails to notify the holder of the loan before the property is disposed of, the holder, upon learning of such action by the person, may demand immediate and full payment of the principal, interest, and all other amounts owing under the terms of the loan'; 'This loan is not assumable without the approval of the Department of Veterans Affairs or its authorized agent' · Checked October 29, 2026

18. Under federal law, the VA funding fee for a loan assumption is 0.50 percent, figured on the unpaid principal balance of the loan on the date of the transfer of the property.

    Sources 12 · 38 U.S.C. §3729(b)(1) and table (b)(2)(I): 'in the case of a loan assumption, the unpaid principal balance of the loan on the date of the transfer of the property'; 'Loan assumption under section 3714'; '0.50' · Checked October 29, 2026

19. According to VA Circular 26-23-10, an assumption involves the transfer of ownership and release of liability of a VA-guaranteed loan and may be processed with or without a substitution of entitlement; without substitution, the original Veteran's entitlement remains encumbered by the loan until it is paid in full; with substitution, if the assumer is an eligible Veteran who intends to occupy the property and has sufficient entitlement, the seller's entitlement is restored; holders or servicers with automatic authority must decide within 45 calendar days of a complete application; a denial may be appealed to VA within 30 calendar days; and the processing fee may not exceed $300, or $250 when VA prior approval is required.

    Sources 13 · Circular 26-23-10 (May 22, 2023), §2(1)(a)–(f): 'An assumption involves the transfer of ownership and release of liability of a VA-guaranteed loan. An assumption may be processed with or without a substitution of entitlement'; 'The original Veteran’s entitlement remains encumbered by the loan until the loan is paid in full'; 'If the assumer is an eligible Veteran who intends to occupy the property as their home and has sufficient entitlement, they may agree to substitute their entitlement for the seller’s entitlement. The seller would receive a restoration of entitlement'; 'within 45 calendar days of receipt of a complete application'; 'may be appealed to VA within 30 calendar days'; 'an assumption processing fee not to exceed $300 on assumptions processed by holders or servicers with automatic authority, or $250 on assumptions that require VA prior approval' · Checked October 29, 2026

20. According to VA Circular 26-23-10, VA does not require the servicer to complete an assumption to release from liability a spouse whose entitlement is not encumbered by the VA loan, when the request is due to a decree dissolving the marriage or a legal separation agreement awarding the property to the Veteran whose entitlement is encumbered; the servicer may proceed with the release on receiving a copy of the decree or agreement showing the property was awarded to that Veteran and a recorded copy of the legal document (for example, a quit claim deed) transferring ownership to them.

    Sources 13 · Circular 26-23-10 (May 22, 2023), §2(1)(e) 'Spousal Releases': 'VA does not require the servicer to complete an assumption to release a spouse, whose entitlement is not encumbered by the VA-guaranteed loan, from liability to a loan if the request is made due to a decree to dissolve the marriage or a legal separation agreement awarding the property to the Veteran whose entitlement is encumbered by the VA-guaranteed loan'; 'A copy of the decree to dissolve the marriage or legal separation agreement verifying the property was awarded to the Veteran'; 'A recorded copy of the legal document (ex. quit claim deed) transferring ownership to the Veteran' · Checked October 29, 2026

21. According to VA Circular 26-23-10, certain transfers of ownership, called unrestricted transfers, are permitted without the approval of the holder or VA; they convey ownership but not liability; the VA funding fee is not assessed on them; and if the transferee wishes to become liable for the loan, the servicer must evaluate their creditworthiness under VA's standards and complete an assumption.

    Sources 13 · Circular 26-23-10 (May 22, 2023), §2(1)(d) 'Unrestricted Transfers of Ownership': 'are permitted without the approval of the holder or VA. These transfers convey ownership but not liability'; 'The VA funding fee is not assessed on unrestricted transfers'; 'If the transferee wishes to become liable for the loan, the holder or servicer must evaluate their creditworthiness under VA’s credit underwriting standards and complete an assumption' · Checked October 29, 2026

22. According to the Fannie Mae Servicing Guide, unless the previous borrower requests a release of liability, the servicer must process certain exempt transfers without reviewing or approving their terms, including a transfer to the surviving party on the death of a joint tenant; to one of the borrowers when the property is jointly owned by unrelated co-borrowers, as long as the one gaining full ownership continues to occupy it and at least 12 months have passed since the loan closed; and, as long as the transferee occupies the property, to a relative of the deceased borrower, to the borrower's spouse, children, parents, siblings, grandparents or grandchildren, or to the borrower's spouse under a divorce decree, legal separation agreement or incidental property settlement agreement; and for loans Fannie Mae purchased or securitized on or after June 1, 2016, the transferee in those transfers to relatives or a spouse is not required to occupy the property.

    Sources 14 · Servicing Guide D1-4.1-02 (08/13/2025): 'Unless the previous borrower requests a release of liability, the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer'; 'A transfer of the property to the surviving party in the event of the death of a joint tenant or a tenant by the entirety'; 'a relative of the deceased borrower, as long as the transferee occupies the property'; 'the spouse, child(ren), parent(s), brother(s) or sister(s), grandparent(s), or grandchild(ren) of the borrower, as long as the transferee occupies the property'; 'a spouse of the borrower under a divorce decree or legal separation agreement or from an incidental property settlement agreement, as long as the transferee will occupy the property'; 'one of the borrowers if the property is jointly owned by unrelated co-borrowers, as long as the borrower who is gaining full ownership of the property continues to occupy it and the transfer occurs after at least 12 months have elapsed since the mortgage loan was closed'; 'For all such transfers affecting mortgage loans purchased or securitized by Fannie Mae on or after June 1, 2016, the transferee is not required to occupy the property' · Checked October 29, 2026

23. According to the Fannie Mae Servicing Guide, if the previous borrower requests a release of liability, the servicer must determine that the transferee's credit and financial capacity are acceptable; if the loan is delinquent and the transferee cannot bring it current, the servicer must evaluate them for all available workout options; and if a modification is appropriate, it must require the transferee to sign an assumption agreement along with the modification agreement.

    Sources 14 · Servicing Guide D1-4.1-02 (08/13/2025): 'If the previous borrower requests a release of liability, the servicer must determine that the transferee’s credit and financial capacity is acceptable'; 'If the mortgage loan is delinquent and the transferee is unable to bring the mortgage loan current, the servicer must evaluate them for all available workout options'; 'the servicer must require the transferee to sign an assumption agreement (which would be signed in conjunction with the modification agreement)' · Checked October 29, 2026

24. According to the CFPB, if you inherited a home you should inform the loan servicer, the company that sends the monthly mortgage statement; to get account information you may need to show proof of your right to the home, which in an inheritance might include a copy of the executed will and the death certificate or a letter from the executor; the servicer should tell you what proof it needs; you can ask how to continue making payments or how to seek a loan modification; and you can also call the HOPE Hotline, open 24 hours a day, at (888) 995-4673.

    Sources 15 · How do I get mortgage information about a home I inherited? (last reviewed Sep 11, 2024): 'You should inform the loan servicer'; 'The mortgage servicer is the company that sends the monthly mortgage statement'; 'a copy of the executed will and the death certificate or a letter from the executor'; 'The mortgage servicer should tell you what kind of proof it needs'; 'how you can continue making payments on the loan or how you can seek a loan modification'; 'open 24 hours a day, seven days a week, at (888) 995-HOPE (4673)' · Checked October 29, 2026

25. According to the CFPB, if you already have title to the house, for example through inheritance or joint tenancy with right of survivorship (where a co-owner gets full ownership when the other dies), the CFPB's rules do not require the lender or servicer to determine your ability to repay before letting you take over the mortgage loan.

    Sources 16 · I recently inherited a house. The mortgage lender said it’s required to determine my ability to repay before it will let me take over the mortgage loan. Is this true? (last reviewed Feb 02, 2024): 'Not necessarily'; 'If you already have title to the house'; 'require the lender or servicer to determine your ability to repay before it lets you take over the mortgage loan'; 'Joint Tenancy with Right of Survivorship, when someone who co-owns a home with someone else gets full ownership when the other person dies'; 'When the borrower already has the title to the house before they take on the mortgage loan, a lender or servicer is not required to evaluate the ability to repay the loan' · Checked October 29, 2026

26. HUD-approved housing counselors provide advice on buying a home, renting, defaults, forbearances, foreclosures and credit issues, often at little or no cost.

    Sources 17 · Find a Housing Counselor: 'Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'often at little or no cost to you' · Checked October 29, 2026

27. The Legal Services Corporation (LSC), established by Congress, funds civil legal aid for low-income Americans; on its site you find a legal aid office by entering an address or city, and LawHelp.org has free legal information and forms.

    Sources 18 · Get Legal Help: 'established by Congress in 1974 to provide financial support for civil legal aid to low-income Americans'; 'enter an address or city below to find an LSC-funded legal aid organization near you'; 'visit LawHelp.org to look up information about your legal questions and find free legal forms' · Checked October 29, 2026