The Alignment Series™ · Free Live Session
Three Transactions, Not One:
Assumption, Release of Liability, and the Divorce Decree
The decree says she takes the house and assumes the mortgage. That single sentence describes three separate legal events, and only one of them gets him off the note. Two of the three can complete, correctly and on schedule, while he is still fully liable.
Free to attend
What this session covers
Assumed and released are not the same event. Only one of them requires him to ask.
In 60 minutes we separate the three transactions that a divorce file routinely collapses into one, and show exactly what each one does to liability, who has to request it, and which authority actually governs it.
- What the Garn-St. Germain Act does, and what it does not do: it bars acceleration on a transfer incident to a decree, and it releases nobody
- Successor in interest, assumption, and qualified assumption with novation, and why only the third substitutes the obligor
- Why the departing borrower has to request the release himself, and what the file looks like when only the transferee asks
- Why most conventional fixed rate loans cannot be assumed at all, in Fannie Mae's own words, and where the divorce pathway actually comes from
- The three new state statutes in California, Maryland and Virginia: what each one compels, which loans it reaches, and why none of them releases anyone
- The question that produces the wrong answer every time, and the sentence to use instead
- Why no one in the country can tell you how often this works, and what the federal data does and does not record
The file that makes it concrete. The decree awards her the house and states that she will assume the mortgage. Title transfers under the decree, the servicer processes it as an exempt transfer, and the matter is treated as finished.
Two years later he applies for a mortgage of his own and the marital home's payment is still counted against him, because he was never taken off the note. Nothing in that file was done wrong. Nobody asked for the release, and under the servicing rules the release was his request to make.
This session addresses what the loan system will and will not do. It quotes statutes and servicing guidance, it does not characterize what a decree should say, and it is not legal advice. The pathway discussed applies to conventional loans sold to Fannie Mae or Freddie Mac; loans outside that, including government loans, follow different rules.
The distinction the whole file turns on
Three transactions. Different authorities, different outcomes, different requesting party.
Compressing these into one sentence is the standard error in this subject area, and it is the error that leaves a client liable for a house he no longer owns.
Transfer of title
Garn-St. Germain, 12 USC 1701j-3. She takes title under the decree and the lender cannot accelerate. She becomes a successor in interest. He remains fully obligated on the note and she is not on it at all. That is what the statute does, and it is all it does.
Assumption without release
She signs an assumption agreement and becomes liable. He stays liable too. It is rarely what anyone in the room intended, and it is the outcome a servicer can quietly deliver when only the transferee asked for something.
Qualified assumption with novation
She assumes, he is released, and the obligor is substituted. The only one that gets him off the note, the only one the servicer underwrites, and the only one that requires the departing borrower to request the release himself.
Three states, and not one release
California AB 3100, Maryland HB 1018 and Virginia HB 304 compel the availability of an assumption. The words release, liability and novation appear in none of them. California reaches only loans originated on or after January 1, 2027, which leaves every legacy low rate loan outside it.
Who this is for
Built for the professionals divorce housing decisions depend on.
If a marital home is being kept and the mortgage is staying in place, the difference between these three transactions decides whether your client is still liable when the case is closed.
Family Law Attorneys
Mediators
Financial Professionals
Judicial Officers
The research behind the session
The Divorce Assumption Report
The session is built on the Divorce Lending Association's published report: the three state statutes read against their own text, the federal baseline, a fifty state table, and the finding that no source in the United States records why an assumption occurred. Read it before the session if you want the full detail.
Your presenter
Jody Bruns, CDLP®
Founder & President, Divorce Lending Association
Jody Bruns founded the Divorce Lending Association in 2011 and established Divorce Mortgage Planning as a defined professional discipline. She created the Certified Divorce Lending Professional (CDLP®) designation and the Real Estate Mediation Specialist (REM-S™) certification, and brings more than 35 years in mortgage and finance to the work.
Under her leadership, DLA has trained more than 12,000 professionals across the disciplines that meet in a divorce file: attorneys, mediators, judicial officers, financial professionals, and mortgage and real estate practitioners. The association is an approved continuing legal education provider, an approved continuing judicial education provider, and an approved continuing education provider with CFP Board and the Institute for Divorce Financial Analysts.
Reserve your seat
Register for the November 11th session.
Free to attend · Live virtual · Recording available to registrants. Confirmation includes complete credit and accreditation detail.