The homeowner will lose his property, but will not be responsible for any loan balance. The buyer can also attempt to obtain a purchase money mortgage from the seller. A. Mortgages may be assumable or due on sale. The existing mortgage will indicate if it can be assumed by a buyer, or whether it must be paid in full at the time of sale. Mortgages that are assumable may nevertheless require an increase in interest rates or qualification of the buyer before assumption.
Most mortgages are due on sale.
The federal Equal Credit Opportunity Act as well as other federal regulations prevent lenders from rejecting loan applicants due to race, color, national origin, religion, sex, marital status, age, or handicap. Additionally, a mortgage lender must consider any public assistance funds, alimony, child support or maintenance payments received by the applicant on a regular basis as if such payments were ordinary income.