All Fannie Mae ARM notes and riders in ConformX created for Texas Home Equity Section 50(a)(6) mortgages contain due-on-sale clauses. For instance, the following text is from the Fannie Mae LIBOR ARM Note, Uniform Instrument Form 3528.44 (Cx6177):
“If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument.”
Unlike the rest of the FNMA ARM Note and ARM Rider Uniform Instruments, no additional section allowing for loan assumptions during the adjustable rate period is contained in any of the FNMA Texas Home Equity Section 50(a)(6) ARM Notes and Riders.
All FNMA Texas Home Equity Section 50(a)(6) ARM loans must be non-assumable per Fannie Mae Single Family Selling Guide, B5-4.1-02:
“These ARM plans should be structured in the same way that they are for other mortgages, except that the mortgage may not be assumable at any time over its full term.”
FHLMC only supports fixed rate Conventional Texas Home Equity Section 50(a)(6) loans, which are also not assumable.
Since no Fannie Mae Texas Home Equity Section 50(a)(6) loans may be assumed, the existing global field mappings on the following fields will be modified to always set FNMA Texas Home Equity Section 50(a)(6) ARM loans to be non-assumable:
- Assumable (field 2280)
- Assumable Loan (field 1170)
These changes will take effect January 12, 2017. If you have any questions or concerns, please contact Client Support at 1.800.497.3584.