A Florida real estate broker is working with a client who wants to assume the seller's existing VA loan. The broker should advise the client that:
Correct Answer
A) VA loans are assumable, but the buyer must qualify and the veteran may remain liable unless released
Correct: A - VA loans are assumable, but the buyer must qualify and the veteran may remain liable unless released. VA loans are assumable with lender approval and buyer qualification, but the original veteran borrower may remain secondarily liable unless formally released by the lender. Why not B: This option is incorrect because "Assumption automatically releases the original borrower from liability" does not match the rule tested by the question. The correct answer is "VA loans are assumable, but the buyer must qualify and the veteran may remain liable unless released". VA loans are assumable with lender approval and buyer qualification, but the original veteran borrower may remain secondarily liable unless formally released by the lender. Why not C: This option is incorrect because "VA loans are never assumable in Florida" does not match the rule tested by the question. The correct answer is "VA loans are assumable, but the buyer must qualify and the veteran may remain liable unless released". VA loans are assumable with lender approval and buyer qualification, but the original veteran borrower may remain secondarily liable unless formally released by the lender. Why not D: This option is incorrect because "Only veterans can assume VA loans" does not match the rule tested by the question. The correct answer is "VA loans are assumable, but the buyer must qualify and the veteran may remain liable unless released". VA loans are assumable with lender approval and buyer qualification, but the original veteran borrower may remain secondarily liable unless formally released by the lender.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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