Homeowners face problems with mortgage companies after divorce or death of a loved one

Contents

1. Consumer Risks
2. Background
3. Homeowner complaints suggest that servicers are failing to help surviving spouses and other homeowners.
4. Federal mortgage programs and CFPB rules incorporate protections for successors
5. Investors and servicers should take additional action to protect homeowners.
6. Appendix: Example Complaints Recieved by the CFPB

Each year, people become homeowners following divorce or the death of a spouse or family member, rather than purchasing the home directly. These homeowners could be surviving spouses, adult children who inherit a family home, domestic violence survivors, or recently divorced parents with young children. If there is a mortgage on the home, these homeowners must act quickly to make mortgage payments in order to avoid foreclosure. And the homeowner may in some circumstances wish to assume liability for the mortgage.

This spotlight provides an overview of the most common problems homeowners encounter with mortgage servicing companies after divorce or the death of a loved one, as reported to the CFPB by homeowners. Federal rules and mortgage program guidelines require servicers to help these successor homeowners get the information they need to manage the existing mortgage and, if the homeowner chooses, to assume the existing loan terms. However, CFPB complaints highlight significant challenges with servicers' handling of these requests, including reported delays lasting months or years, as well as allegations that servicers are unnecessarily pressuring homeowners to refinance at higher interest rates rather than helping them manage existing mortgages.

Consumer Risks

1. Pressure to refinance: Homeowners report being incorrectly told that they must refinance the loan at today's higher interest rates, rather than being offered options for managing the existing mortgage. Homeowners describe significant stress at the prospect of not being able to afford a new mortgage, including the possibility of having to uproot their families and move.
2. Delays: Many homeowners report waiting months or even years for servicers to process their requests, with some reporting that servicers repeatedly request the same documentation or fail altogether to respond to inquiries. When these delays occur, homeowners report incurring legal fees, being at risk of violating their divorce decrees, missing out on lower cost refinance opportunities, and becoming delinquent and facing foreclosure.
3. Refusals to release the original borrower from liability: Homeowners report that some servicers are blocking requests to release the original borrower from liability, as divorce decrees often require. For homeowners required by court order to remove an ex-spouse from the mortgage, this can lead to being found in violation of the court order or having their property settlement re-opened. Homeowners report this happening even when the successor homeowners demonstrate their ability and willingness to repay the loan.
4. Safety risks to survivors of abuse: Domestic violence survivors have reported that servicers continue sending account information to their abusers and require their abusers' consent for account changes, potentially creating safety threats.

Investors and guarantors of mortgages play a critical oversight role. Based on these findings, investors and servicers can do more to reduce the risk of harm to successor homeowners. Investors should:

1. Ensure that servicers are complying with all applicable law and guidance, including the guidance provided by the federal mortgage agencies.
2. Ensure their policies are not unnecessarily pushing successor homeowners to refinance their mortgages.
3. Examine whether their underwriting requirements are posing an undue obstacle to mortgage assumptions where the successor demonstrates an ability and willingness to pay.
4. Develop, with mortgage servicers, policies and procedures to assist successors in interest who are survivors of domestic violence, with a goal of protecting the safety and property interests of the survivor.

Homeowners have the right to clear, consistent, and timely information from mortgage servicers. Homeowners who get the runaround or experience pressure to refinance an existing mortgage on their home should file a complaint with the CFPB.

Background

Each year, people become homeowners following divorce or the death of a spouse or family member, rather than purchasing the home directly. These homeowners may be surviving spouses, adult children, domestic violence survivors, or recently divorced parents with young children seeking to protect their rights to their family home. These individuals are sometimes referred to as successors in interest.

If there is a mortgage on the home, these homeowners will need to make sure it is paid in order to avoid foreclosure.¹ They may need to know where to send the payments, how much payments are, and what the principal balance and loan terms are. If the mortgage is past due, they may need help avoiding foreclosure. 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.

CFPB rules and federal housing program guidelines require mortgage servicers to help these homeowners in a timely way. Mortgage servicers are required to let homeowners know what documents they need to submit to prove their ownership interest and, once that interest is confirmed, treat them like an original borrower on the loan.² If the homeowner wants to assume liability on the mortgage, and have the original borrower released from liability, the servicer must process that request in a timely way.³

However, CFPB complaints suggest that some mortgage servicers are making it difficult for surviving spouses and other homeowners to get the help they need. Additionally, in some cases, servicers appear to be pushing homeowners toward unnecessary refinancing.

Homeowner complaints suggest that servicers are failing to help surviving spouses and other homeowners.

A review of CFPB complaints found that homeowners reported that mortgage servicers provide incomplete or inaccurate information or fail to timely process their assumption paperwork.

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. If homeowners wish to modify the loan, to change the payment terms or remove the original borrower’s name from the mortgage, 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.⁴ Yet homeowners, both those seeking merely to manage the existing mortgage and those seeking to assume liability and modify the mortgage (for example, by changing obligors) report being told that they must refinance the loan at today's higher interest rates. Servicers sometimes even insist on the need to refinance just to remove the name of a deceased spouse from the monthly mortgage statements.

For these homeowners, an unnecessary refinance can increase their interest rate, add additional fees, and drive up their housing costs.

A homeowner in Virginia noted:

“In [month], 2007, my husband and I purchased our home together with both of our names on the property deed… After the unexpected death of my husband in [year]… I have been trying to become a successor in interest to take over the existing mortgage to keep living in the same house raising my minor kids in stable and familiar environment... The mortgage company provided me a list of documents required, and I have submitted those, often multiple times… [W]hen I call them, they give me inconsistent explanations for deficiencies, and then proceed to try to strong-arm me into refinancing the mortgage.”⁵

Homeowners report that the process to assume a mortgage can take months or even years, and they are often unable to get any resolution.

Homeowners report that servicers are providing inaccurate or incomplete information; failing to timely respond to requests for information; repeatedly requesting additional or duplicative documentation after the successor has already provided documentation; and are failing to process assumptions. They also report that these issues can be exacerbated when their loan is transferred to a new servicer.

A homeowner in Missouri noted:

“I have been trying to assume the VA Mortgage Loan of my deceased husband since September 7, 2023. It [has now been] 156 days if anyone is counting. The biggest issues with [mortgage servicer] are lack of communication, transparency, and following through with what they say they will do or are doing… [Mortgage servicer] responded with a completely different perspective, acknowledging my request to transfer the property and then stating: “We apologize for the inconvenience this matter has caused. We currently do not have a program to remove a name from the loan. The Note associated with the obligation to repay the debt was executed by (Deceased Husband 's Name). In order to remove a party from the loan, the loan would have to be refinanced.”⁶

Homeowners report that servicers refuse to release an original borrower from the loan even when the homeowner is paying the loan.

Many successor homeowners report being told they cannot assume the loan even when they demonstrate their ability and willingness to repay the loan. Homeowners describe showing months or years of making on-time loan payments from their bank accounts, high credit scores, good income, and lengthy employment histories and still being steered to a costly refinance instead of having their assumption promptly processed.

A homeowner in Washington noted:

“I have applied for an assumption loan after a divorce with full cooperation of my ex-husband. I started the process in December. Since that time to date I have exchanged about 30 emails back and forth. Each time additional documentation is need by [mortgage servicer] for a simple removal of my ex’s name for a loan I have been paying since 3/2021 on my own. I have given multiple statements from my banks, investment companies, paystubs… They continue to push out my request and then need me to resend updated information. I have a very high credit score, this is a small loan at this point and I have good income. There is no reason for the delay. I was told it would have been easier to just refinance for the loan, which would be about 4-5% higher interest rate… I have proven over and over again I can, and am, paying my loan every month without fail.”⁷

Homeowners who are also domestic violence survivors report fear and stress caused by mortgage servicers’ practices.

Intimate partner violence survivors report that servicers refuse to remove the name of their abuser, continue to send mortgage information to the abuser while failing to send it to them, and require the consent of the abuser for decisions related to loan, threatening their health and safety and putting them at risk of foreclosure.

A homeowner in Texas noted:

“I divorced due to domestic violence, the process was lengthy as my ex-husband sought to sabotage the process and my finances… I was/am living in the home with our children. Final orders awarded the house to me. At this time I was able to communicate with [mortgage company] and began making payments towards a trial period to avoid foreclosure…When I called to make the 2nd payment on the new loan I was informed they'd put it into foreclosure. ALL COMMUNICATION was being directed to my violent exhusband I asked them to please send copies of communication to the home on the loan and they would not. They would not add my phone number for contact for months. They would not communicate with me about modification. They sent that information to my ex-husband as well. I've been trying to save this loan since I was allowed to make my first payment . . . they've refused to cooperate, communicate, or accept any payment from me…”⁸

Servicers often respond to homeowner complaints with inaccurate and misleading information.

Servicers often falsely assert that successor homeowners cannot get information about, make payments on, or be included in correspondence regarding the mortgage without independently qualifying for the loan or being reviewed for “eligibility” to assume the mortgage. Some servicers falsely claim that investors forbid assumptions and blame investor underwriting requirements or assert that investors do not allow assumptions where a modification is necessary. One servicer admitted cutting off successor homeowners’ account access while processing assumptions due to an ongoing “systems” issue. Servicers assert that delays beyond the timelines provided for in federal guidance are acceptable because of increased processing volumes or because their processing is ongoing. Homeowners also report being denied account access because they are not an “authorized third party” or because they did not pay closing costs for assumption, even when they have provided documents to the servicer showing their ownership of the home.

Homeowners report a range of harms caused by servicer actions.

Homeowners who are told that they must refinance into a higher interest loan with associated closing costs report the stress and anxiety caused by the prospect of being unable to afford the new mortgage and potentially losing their home. Homeowners also report being charged inflated, inaccurate, and duplicative fees caused by servicer mistakes. Homeowners report incurring legal fees, being at risk of violating their divorce decrees, missing out on opportunities when interest rates were lower to refinance into a lower interest rate loan, and becoming delinquent and facing foreclosure due to servicer delays.

A homeowner in Georgia noted:

“As a single mom I can’t afford to refinance this home and live here. I will have to move my kids out of the schools and move homes when they are already struggling.”⁹

A homeowner in Colorado noted:

“[The mortgage company] stated . . . the processor that originally had my file is no longer with the company so I need to now complete a new application, including sending fees I have already paid, and allow [them] to conduct another credit inquiry.”¹⁰

A homeowner in New Mexico noted:

“I have a divorce decree that I will soon be in violation of because this process has taken significantly longer than the company said it would.”¹¹

Federal mortgage programs and CFPB rules incorporate protections for successors

CFPB rules require mortgage servicers to have policies and procedures to verify promptly the legal status of successor homeowners.¹² The CFPB rules are meant to ensure that successors are able to access information about the mortgage in a timely way, without undue delay. Once their legal ownership interest in the property is confirmed, successors should be able to access mortgage information, make payments, and be evaluated for help avoiding foreclosure, if needed.

Federal mortgage program guidelines also provide protections for these homeowners. In general, servicers are directed to process, “without reviewing or approving,” transfers of ownership interests to successor homeowners.¹³ If the homeowners seek to assume the mortgage and have the original borrower released from liability, the guidelines also set forth requirements for processing the successor homeowner’s assumption of that liability.¹⁴ The guidelines vary, but include required timelines,¹⁵ allowable and prohibited fees,¹⁶ underwriting requirements,¹⁷ and processes for evaluating an assuming borrower for a loan modification.¹⁸ In general, successor homeowners are exempt from requirements that would otherwise apply to an assumption by an arms-length purchaser.¹⁹ VA and Freddie Mac guidelines, for example, prohibit the charging of certain fees that can otherwise be charged for transfers of ownership.²⁰ FHA guidelines provide underwriting flexibility for assumptions by successors in interest.²¹

Investors and servicers should take additional action to protect homeowners.

CFPB complaints suggest that some mortgage servicers are making it difficult for surviving spouses and other homeowners to get the help they need following divorce or the death of a spouse or family member. These challenges are posing significant risks to these homeowners’ ability to manage the mortgage and protect their home.

Investors and guarantors of mortgages play a critical oversight role. Based on these findings, investors can do more to reduce the risk of harm to successor homeowners. Investors therefore should take the following actions:

1. Investors should ensure that servicers are complying with all applicable law and guidance, including the guidance provided by the federal mortgage agencies. The reports from homeowners included in this report suggest that servicers are failing to follow existing guidance from the federal mortgage agencies regarding the treatment of successor homeowners. This appears to be particularly true in terms of guidance regarding assumptions. Consolidated guidance specifically focused on assisting successors in interest could be helpful in clarifying homeowners’ rights.
2. Investors should ensure their policies are not unnecessarily requiring a successor homeowner to refinance the mortgage. Investors should generally examine whether their policies appear to require a refinancing when there are options that are less costly and burdensome to the successor in interest and adequately protect investors’ interests. In particular, investors should examine whether any requirements for removing the name of a deceased borrower from the mortgage loan are posing a barrier to assumption. Servicers are also responsible for assuring that their internal policies and procedures are not creating pressure on homeowners to refinance.
3. Investors should examine whether underwriting requirements are posing an undue obstacle to mortgage assumptions where the successor demonstrates an ability and willingness to pay. CFPB complaints suggest that many homeowners are not able to take advantage of mortgage assumptions even after demonstrating the ability to continue paying the mortgage. Investors largely control the underwriting standards in place when a homeowner seeks to assume liability on an existing mortgage and release the original borrower from liability. Where a homeowner has already taken over the responsibility of making the mortgage payments, full underwriting of that homeowner may not be necessary. For example, FHA guidelines allow for assumptions by a confirmed successor in interest if 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.²²
4. Investors and servicers should develop policies and procedures to assist successors in interest who are survivors of domestic violence, with a goal of protecting the safety and property interests of the survivor. For example, investors and servicers should review policies and procedures related to communication with the homeowner to identify whether they inadvertently prevent the survivor from accessing mortgage information, thereby potentially creating risks of delinquency or risks to physical safety.²³ Homeowners facing domestic violence should not be forced from their homes in order to protect their financial information from an abuser or otherwise be put in harm’s way by mortgage servicers.

Homeowners have the right to clear, consistent and timely information from mortgage servicers. The CFPB encourages successor homeowners facing problems with transfers of ownership or mortgage assumptions, including pressure to refinance an existing mortgage on their home, to submit a complaint to the CFPB. The CFPB will send the complaint to the company for a response. Complaints also help the CFPB understand homeowners’ experiences and inform our supervision and enforcement work.

Appendix: Example complaints received by the CFPB

The following example complaints were received by the CFPB between December 2021 and August 2024 about successor in interest issues or issues related to a mortgage assumption. These complaints are organized by the themes discussed in prior sections.

Servicers often pressure homeowners to refinance.

A homeowner in Virginia noted:

“I have tried for several months now to become the successor in interest for a mortgage in my deceased husband’s name. In [month], 2007, my husband and I purchased our home together with both of our names on the property deed… After the unexpected death of my husband in [year]… I have been trying to become a successor in interest to take over the existing mortgage to keep living in the same house raising my minor kids in stable and familiar environment... The mortgage company provided me a list of documents required, and I have submitted those, often multiple times… [W]hen I call them, they give me inconsistent explanations for deficiencies, and then proceed to try to strong-arm me into refinancing the mortgage rather than exerting my rights to become a successor in interest. This is coercive, and deprives me of my rights under federal law.”²⁴

A homeowner in Oklahoma noted:

“My ex-husband and myself completed the required paperwork and submitted it to the mortgage company. At that time, we were told it would take 180 days. Since this time the mortgage servicer has refused to accept our documentation to complete the loan assumption. The mortgage servicer has requested we amend our divorce decree which is not legally possible in the state of Oklahoma. What is legal in Oklahoma is completing an incidental property settlement agreement, of which we did and submitted to the mortgage servicer. However, they are refusing to accept the documentation even though the VA Underwriting guidelines state it is acceptable form of documentation of mortgage loan assumptions. The mortgage servicer has recommended I refinance the home at a cost and a much higher interest rate, which I see the mortgage servicer would profit from a refinance at a much higher rate than the current loan I have. My ex-husband and myself are both in agreement and would like this to be completed. Unfortunately, the mortgage servicer is refusing to comply and complete the loan assumption.”²⁵

A homeowner in California noted:

“I have been attempting for several months to assume the mortgage on my deceased mother's home. I am the sole heir, and have been recorded on the title… They again ignored my inquiries for a few months. Finally they replied that the current mortgage is FHA and is not eligible for an MPI review, but that I could simply refinance into a conventional loan to remove MPI. Had [the mortgage servicer] responded in a timely manner, when mortgage rates were in the 3% range, this would have been a feasible option. However, due to their egregious delay, mortgage rates have doubled making a refinance option untenable.”²⁶

A homeowner in Texas noted:

“Hello I writing in regards to an issue I am having with my mortgage servicer... My husband passed away [date redacted]. I submitted documents in January 2024 to have my mortgage deed transferred in my name… I never heard back from them, so I called Customer Service on 7/23/2024 and was told the only option I had was to refinance my loan and proceeded to transfer me to a Loan officer. I advised her that is not what I wanted to do. And I disconnected the call. I'm very frustrated at this point and would like some type of resolution to this matter. It seems as though the C/S rep didn't know the correct answers or try to find out if there were other options. Thanks.”²⁷

Homeowners report that the process to assume a mortgage can take months or even years, and they are often unable to get any resolution.

A homeowner in Missouri noted:

“I have been trying to assume the VA Mortgage Loan of my deceased husband since September 7, 2023. It [has now been] 156 days if anyone is counting. The biggest issues with [mortgage servicer] are lack of communication, transparency, and following through with what they say they will do or are doing… [Mortgage servicer] responded with a completely different perspective, acknowledging my request to transfer the property and then stating: “We apologize for the inconvenience this matter has caused. We currently do not have a program to remove a name from the loan. The Note associated with the obligation to repay the debt was executed by (Deceased Husband 's Name). In order to remove a party from the loan, the loan would have to be refinanced. For information regarding refinancing, you may contact a Loan Consultant at [phone number redacted] for your home financing needs.” They were ignoring the fact that I was eligible to assume the loan as the surviving spouse and trying to push me to refinance and obtain a new loan.”²⁸

A homeowner in California noted:

“I have been trying for 6 months to reach out to [the mortgage companies] to initiate a loan assumption process due to divorce. Lack of response and ability to speak to anyone to answer questions or find out where we are in the process has been insanely frustrating. We understand and were told from the get go that the assumption process could take up to 120 days to process, but during this time we have yet to receive a loan assumption packet or contact with anyone who can help clarify the process. We don't even know if that 120 day countdown has started.”²⁹

A homeowner in Illinois noted:

“On 2/10 I sent in all documents required for a loan assumption from divorce. It is a VA loan and I am a veteran. [Mortgage servicer] has verified that they have all of the information and I have let them know about the urgency of this situation. I have called [mortgage servicer] 20 times, each time with call lengths of over 15 minutes. I have asked for managers to call me back. They will no longer transfer my calls out of the call center. They say I need to wait. I have had two court dates come and go with no resolution bc they wont provide me with information or documents. I have asked for managers to call me back. I have sent emails to the company. Nobody will speak to me.”³⁰

A homeowner in South Carolina noted:

“Was told about the Assumption Process in January of 2023. They later told me I needed a Credit Qualified Assumption, as I was attempting to remove my ex-husband from the loan. Was told it would take 30 days, then 90 days, then 90 more days as the paperwork had to be sent over and approved by the FHA directly. I filled out the Universal Loan packet multiple times. I could never reach or received a reply from the person listed in the paper work… I was consistently threatened in the paperwork language, that my application would be cancelled, if information that was mailed out to me were not received back in 15 business days; despite it often taking 15 days to arrive to me. No guidance on how to complete the paperwork, what they were looking for regarding “buyer” and “seller”, constantly asking for my ex husband to sign documents; despite me providing them the Divorce Decree stating that he had “no interest in the home”. It was a nightmare, and I could have been held in contempt of Court due to them not completing the process in a timely, honest and professional manner. Process wasn't complete until September. They even send me a letter stating the they could not complete the process because I had not yet made that particular month 's payment (I had until the 15th before a late fee would even be processed). I had been paying the Mortgage independently for more than 12 months. They charged me $550.00 to drag out a simple process, not provide support and lie regarding the FHA having to approve the process. It was way worse than obtaining the mortgage from the beginning.”³¹

A homeowner in New York noted:

“This past July and August 2023, I started the process of release of liability, I filled out the application and sent the documents requested, and I received a letter saying that I did not submit the additional document requested which letter which I never received, and that application was canceled. I resubmitted another one in September And they sent a letter requesting additional information, and this time I did receive the solicit list. In December 2023 I mailed the package of requested documentation and they sent me an email by the beginning of January saying that they did not did not receive the information. Then they said to email all the documents I emailed them I received an email from them stating that I did receive the documents and then two weeks later the end of January. They tell me that they did not have the documents to please send everything on the list again, so I recently mailed another package to the address given by them on the phone with the escalating manager and I mailed it to them and I gave them a USPS tracking number and they officially delivered received it February 20 and they keep receiving emails from them saying that I did not send the information and they’re requesting it and the requesting it and I’ve called them. I spoke to the escalating manager three days ago and they said they were going to try and locate the package. Apparently they want me to send everything again I don’t know what else to do. I keep mailing them emailing them and they keep saying they don’t receive anything and I don’t know what else to do.” ³²

A homeowner in Florida noted:

“I called [mortgage servicer] about the death of my mother (co-borrower) and that I am her sole survivor/successor. I was told that a form will be mailed out that will provide my information that requires my husband’s signature (Primary Borrower) to have my mother’s name removed and add my name to our mortgage account.

When I provided the death certificate and followed up via the [mortgage servicer] website (per instructions by the [mortgage servicer] Rep) I was informed that [mortgage servicer] does not have such a program in place to add/remove a name from our mortgage account.

I responded that I had spoken with [mortgage servicer] and was informed to await a form that will allow me to assume my mother’s role as co-borrower as she is no longer living, their response was to send me a form via pdf that served as a loan application.

When I had spoken with the [mortgage servicer] Rep on 3/6/24, I had specifically asked him if I can be added to the account without refinancing our mortgage account and continue with our current mortgage payment plan (no change in our payments or interest rates) and I was assured that we can...

I am not asking to refinance. I am not looking to make any loan changes. I am asking for my name to be added to our existing mortgage account as my husband is the Primary Borrower and my mother was the Co-Borrower. My name is already listed on the Title/Deed document when we initiated the loan with [mortgage lender]. [Mortgage lender] sold/transferred loan to [mortgage servicer] in December 2022...

It is my understanding that when a borrower dies, the successor/heir can have their name added to an existing mortgage account. I am still mourning my loss, she was the last of my maternal family. This year and a half has been a very difficult time for my family. About two hours ago, I received a call from [mortgage servicer] Assumption Rep, who had informed me that the Assumption form was informal and as long as I submitted the remaining requested documents that my name will be added to our mortgage account without further delay. However, the letter we received from [mortgage servicer] stated differently which I sent an email back to Assumption department for clarification today.”³³

A homeowner in Tennessee noted:

“To date, [mortgage servicer] has not offered me very much accurate or reliable information about anything, but I find this situation especially frustrating as I have done everything they have required and several things I should not have to but cannot seem to get them to service this loan appropriately… I have been out of the mortgage industry for a decade but spent a career working in this field and I have reached the point where I need to bring this to the Bureau. I am fortunate that I can afford to make up for the mistakes this servicer has made in the administration of this account. The average consumer would have given up on this process, or been put in financial distress over the escrow issues, or worse, they would have been strongarmed into refinancing a low interest, low balance loan so that [mortgage servicer] could make more profit or at least made enough interest to justify the cost of servicing.”³⁴

A homeowner in Pennsylvania noted:

“Beginning in March of 2022 I began to try to assume the loan previously held by my deceased parents… The loan for the property was originally held and serviced by [mortgage servicer]… Every time I would follow up by phone to inquire about the status of the process, I would speak to a different customer service representative who would give me different information, tell me to re-send the same documents I had already sent… As of August 1, 2022 the servicer for the loan changed. I was informed that [new mortgage servicer] was now the servicer and that I had to begin the process of identifying myself as Successor in Interest all over again and then try to assume the loan after this was complete. This experience has been even more stressful… I resent many documents more than four or five times and received numerous mailings and phone calls that did not apply to the loan… I am qualified, have submitted all information required, and am truly confused and frustrated about this.”³⁵

A homeowner in Utah noted:

“Divorce decree required me to remove spouse from loan documents, I had until January 1, 2024. That date has come and passed. Luckily for me I suppose my ex is not pressing me with enforcement of decree at this time. Original application with lender submitted in October, I was told loan was being transferred to another lender and would need to wait until loan was fully “received” received or processed at new servicer, even thought they are the same companies...”³⁶

A homeowner in California noted:

“Our father passed away. He left the house he was living in to my brother and I in his will. He had some type of loan modification in place with [mortgage servicer]. We notified [mortgage company] soon after his death and asked for assistance moving forward to straighten it all out… We sent the documents requested many times, and they kept requesting the same things and did not respond when we showed we had sent them in over and over. Then they said they could not approve a Family Transfer because the loan was now in default! This whole process took more than one year, and the loan was falling behind... We are afraid they are delaying on purpose so they can steal our fathers house as it has substantial equity. We are concerned if we make any payments, [mortgage servicer] will not apply them to the loan and will continue with a foreclosure sale... We need help resolving things with them.”³⁷

Homeowners report that servicers refuse to release the original borrower from the loan even when the homeowner is paying the loan.

A homeowner in Washington noted:

“I have applied for an assumption loan after a divorce with full cooperation of my ex-husband. I started the process in December. Since that time to date I have exchanged about 30 emails back and forth. Each time additional documentation is need by [mortgage servicer] for a simple removal of my ex’s name for a loan I have been paying since 3/2021 on my own. I have given multiple statements from my banks, investment companies, paystubs... They continue to push out my request and then need me to resend updated information. I have a very high credit score, this is a small loan at this point and I have good income. There is no reason for the delay. I was told it would have been easier to just refinance for the loan, which would be about 4-5% higher interest rate… I have proven over and over again I can, and am, paying my loan every month without fail.”³⁸

A homeowner in Nevada noted:

“I applied for a loan assumption due to a divorce, which has taken [mortgage servicer] several months to reply. [Mortgage servicer] will not allow me to speak with any loan assumption specialist. They sent me a denial letter stating that I have insufficient history of income yet I have been in the same line of work for over 20 years… The initial rep that I spoke with said that . . . I would qualify on my own since I originally qualified for the loan on my own. Fast forward several months later I get the denial. Now I am demanding to speak with somebody there and nobody is responding…”³⁹

A homeowner in New Jersey noted:

“I applied for a Qualified Assumption with my mortgage lender… in order to get my ex husband off my mortgage as per the terms of my divorce. I was told my application was denied do to high Income to Debt ratio. I questioned this [because a]ccording to my calculations my IDR is 32%. Totally within the acceptable range. I have never missed a mortgage payment and my credit score is stellar. I was told that once an underwriter makes a determination I can not appeal it. They suggested I try to refinance to get my payments lowered. My issue is, I already paid off all my interest and I am currently paying down the principal with only… 6 years to pay off my mortgage in full. I do not think I should have to start paying interest again for the next 20-30 years just to get my ex husbands name off the mortgage. (His name has already been taken off the title.) I feel that my denial is unfounded. And to be honest, I feel that it was made because the bank stands to make more money if I refinance.”⁴⁰

Homeowners who are also domestic violence survivors report the fear and stress caused by servicers’ practices.

A homeowner in Washington noted:

“I have been divorced since 2018. They claim even though we are divorced he is still responsible for the loan. I have submitted all the documentation, including 2 quit claim deeds. I have had two addresses in the last 32 years. He has had numerous. We do not speak and [mortgage company] told me numerous times that if I assume the loan that I have been paying on for 21 years I must requalify and pay a fee. They refuse to remove the name of my abuser which I have to look at constantly. I can prove everything with documentation. He was a federal employee and has been disciplined numerous times for violent behavior. I have been paying long enough for his constant verbal and caustic road rage behavior. Be aware I can prove everything I say, including the fact that I paid for the refinance 10 years ago AND my mother… gave me the down payment in a gift letter for the original FHA loan.”⁴¹

A homeowner in Alabama noted:

“I was married and my husband bought this house in 2016. He put everything in his name and I was naive about this. In August 2020 I suffered domestic violence, he was convicted, he asked for a divorce and I was awarded the house in the court settlement, May 2021… In late June, my in-laws informed me of a letter to my former husband from a law firm. They gave it to me (he has been out of contact with anyone for several weeks). This was a foreclosure letter for July 29. I have tried repeatedly to contact the mortgage company to allow me to see the bill, pay the mortgage and stop the foreclosure. They will not acknowledge the court settlement nor communicate with me out of their greed - because my name is not on the mortgage even though the house was awarded to me. This is life altering for me and my 5 and 3 year old. I am desperate and writing everyone and anyone to help… Please help.”⁴²

A homeowner in Texas noted:

“I divorced due to domestic violence, the process was lengthy as my ex-husband sought to sabotage the process and my finances. . . I was/am living in the home with our children. Divorce was final On August 28, 2023. Final orders awarded the house to me in June of 2023. At this time I was able to communicate with [mortgage company] and began making payments towards a trial period to avoid foreclosure… When I called to make the 2nd payment on the new loan I was informed they'd put it into foreclosure. ALL COMMUNICATION was being directed to my violent exhusband I asked them to please send copies of communication to the home on the loan and they would not. They would not add my phone number for contact for months. They would not communicate with me about modification. They sent that information to my ex-husband as well. I've been trying to save this loan since I was allowed to make my first payment in June of 2023 they've refused to cooperate, communicate, or accept any payment from me…”⁴³

Homeowners report stress and anxiety from servicers telling them they must refinance, which they cannot afford.

A homeowner in Illinois noted:

“I have requested to do an assumption through divorce to remove my ex husband from the note/loan… [The lender] said they do allow assumptions through divorce when both parties are on the loan and title to remove one spouse off the loan… I sent them the divorce decree as evidence but are refusing to assist me in this process. I have a great interest rate of 3.875% and cannot afford to refinance at this time as it will double my monthly payment with an interest rate of 7.5% currently. They are leaving me no choice but to sell my home and have nowhere to live. I can’t afford even a small apartment at the current rental rates or to buy something smaller with such high interest rates. I will be homeless. Please help.”⁴⁴

A homeowner in Georgia noted:

“I have gone round and round with them since Sept 2023. I have sent them everything they have asked for and they now say they don’t have enough information and info is missing so they denied and cancelled my loan assumption. Per my divorce decree, I have to get this done and they have made my life a living hell. As a single mom I can’t afford to refinance this home and live here. I will have to move my kids out of the schools and move homes when they are already struggling and this company is forcing me to do so because they are missing information. What information is missing and why can’t I have a representative from the bank talk to me… This loan assumption has been so awful and I know why they are making it hard because they don’t want to do it.”⁴⁵

A homeowner in Maine noted:

“In November 2023, I applied for an assumption due to a divorce, and the house was given to me solely with the understanding to refinance or assume the mortgage… They are continuously holding up the process by saying they need one thing or another, some I have already given multiple times... I am a single mom who is going to school, working, and raising my kids. I feel like they are not upholding their commitment to the 45-90 days due to if I refinance they would make more off the loan. I can not afford an 8% interest rate and have the right to assume a loan that is and has been in my name. I am not sure where to go. With the current market, it is not feasible for me to sell as I am not able to find a home that would fit my budget and have to uproot my children. The one who is processing my loan has lost my paperwork and wants me to resubmit. I am frustrated and feeling hopeless.”⁴⁶

Homeowners report incurring fees and costs that should not be charged or are due to servicer errors.

A homeowner in Pennsylvania noted:

“I am assuming an existing mortgage due to divorce. Essentially, I just need to remove my ex-husbands name from the mortgage. This should be extremely simple given that I have excellent credit and more than enough income to pay the loan. I began this process in September 2023 and it is still not complete. The people handling the process have been completely incompetent. It has taken months and months. They were not able to provide an accurate estimate of the cost. I had to incur attorney fees to explain Pennsylvania law to their underwriters and legal counsel because they are not familiar with the state. I have asked numerous times for my situation to be escalated and I have never received a response from anyone other than the low-level processor, who keeps telling me that everyone in their department is new…”⁴⁷

A homeowner in Colorado noted:

"I requested a loan assumption from my mortgage company… to remove my ex-husband from the mortgage loan as detailed in the divorce agreement on 3/8/23. I sent the the completed application to the address provided via UPS overnight on May 15, 2023. The application was stamped received on June 9, 2023 and I received a letter dated July 18, 2023 requesting further supporting documentation and a request for a check for payment of fees. I returned all requested financial supporting documents. [After months of inquiries, duplicative requests, Servicer employee] stated yesterday they reviewed my file according to the notes and a new application has been sent to me because the processor that originally had my file is no longer with the company so I need to now complete a new application, including sending fees I have already paid, and allow [the mortgage company] to conduct another credit inquiry. When I asked why that was necessary, he confirmed I have to start the whole process over because the processor is no longer with the company invalidating my original application…”⁴⁸

A homeowner in Texas noted:

“I have been working with [mortgage company] to complete a VA loan assumption of my existing mortgage. I am now divorced and trying to remove my ex-spouse from the loan. The assumption process has been terrible, I do not receive timely responses from my loan officer or loan processor and I have no clue what exactly is needed to prepare for closing. The last update I received is that I must pay an escrow shortage in full of over $5000.00 rather than be able to extend the escrow shortage over 12 months. This is my existing mortgage and I'm simply trying to take off my ex-husband but yet the mortgage company wants me to pay over $8000.00 in fees to complete the assumption. I would like to speak with someone who can accurately explain to me what options I have to get the assumption completed...”⁴⁹

Homeowners report a range of other harms stemming from servicers’ failure to provide accurate information or timely process assumptions, such as causing them to risk violating their divorce decrees, to miss opportunities to refinance into a lower interest rate, or to become delinquent.

A homeowner in New Mexico noted:

“I submitted an application with [mortgage company] for a loan assumption resulting from a divorce in October. They received it 10/20/2022. Their paperwork said the process should take 45 days. After almost two months of hearing nothing, I began calling… In February, I finally received a packet from the department, requesting more documents, signing of new disclosures, checking a box or two I had missed on the initial application. Many of the documents, such as w-2s, were repeats from October but they had expired due to how long it had taken. I sent that back on 2/8/2023. Again, I have heard nothing… I have not received any communication. I have a low interest rate so assume that they would prefer not to push this forward. I have a divorce decree that I will soon be in violation of because this process has taken significantly longer than the company said it would.”⁵⁰

A homeowner in Pennsylvania noted:

“I sent a completed loan modification and assumption packet on Oct 20, 2021 via fax after several other attempts to get them the documents. They did not approve it until April 2022 despite having all the information. I had to go into forbearance when my job got canceled due to COVID, and my alimony stopped. I have to assume the loan or refinance as part of my marriage settlement agreement. I have a past due balance of approximately $49000.00. I have paid on my home… and put my pension down on my home, so my equity is important to me. Because of the delay I was not able to receive a better interest rate and it cause the amount of my forbearance to be higher...”⁵¹

A homeowner in Utah noted:

“The company is not transferring the mortgage via survivor in interest. I have submitted all the documentation. I/we call 2x per week. The company tells us to wait for a final decision until a specific date (Nov. 24th). After November 24th, they say they don't have the information or it isn't a clear document and that it needs to be resubmitted. This process has been in the works for over 4 months with no decision and no contact person to help. They are delaying the transfer of survivor in interest to try and force this mortgage into foreclosure.”⁵²

A homeowner in Arizona noted:

“I am getting a divorce My loan is VA/assumable I was told the qualification is quite simple with signature of ex or judges orders. [The mortgage company] refuses to give me any assistance, the judge needs to see I am able to qualify for the assumption and refused to allow me the opportunity to assume the loan without that information from [the mortgage company]. [The mortgage company] will not even allow me to speak to a lender without the order from the judge and no one else can tell me the parameters required to qualify so I can show qualification through another lender. Because of their unreasonable stance I will lose my home.”⁵³