Transferring Loan To Relative

Hi MortgageMaster,

My father has a mortgage on a house. My brother wishes to live in the house and take over ownership. Is there a way for my dad to transfer the mortgage to my brother and be released of responsibility of the mortgage?
My fear is that my brother may default on payments. If this occurs how would this effect my father?

Thanks, Elaine

Hi Elaine,

The only way for your Dad to remove his liability completely from his home is to sell the property and insure the transaction with a Title policy(ies). Your brother can potentially assume the loan, if allowed and approved by the lender. Assumptions, however, are not guaranteed, are tricky, and can still leave the seller responsible in the case of default. i would contact a real estate attorney to best protect your father. As usual, advice from the MortgageMaster is not to be construed as legal advice but is based on experience. Please seek legal/tax counsel before making any decisions.