Keeping Families In Their Homes: Why Mortgage Assumption Matters

Divorce is already an emotionally and financially challenging process. For parents, that difficulty is compounded by the need to maintain stability for their children. One of the biggest factors in that stability? Keeping them in their home.

Unfortunately, outdated mortgage policies often make that harder than it needs to be. That’s why I introduced Senate Bill 0689 — to ensure that Maryland families are not unnecessarily uprooted during one of the most difficult transitions of their lives.

This issue was first brought to my attention by Kelly Seely, a constituent from District 33 who found herself in an impossible situation while going through a divorce. As part of her settlement, she retained ownership of the home she and her former spouse had purchased together — a home where her children had grown up, built friendships and attended school. Determined to maintain that stability, she sought to assume the existing mortgage in her name.

Mortgage assumptions allow a new borrower to take over an existing loan without altering its interest rate or repayment terms. For instance, if a homeowner has been paying a 15-year mortgage for three years, the assuming borrower would step into the remaining 12 years under the same terms. It’s a straightforward, practical solution — one that should have been available to Kelly without issue.

Despite meeting all credit and income qualifications, Kelly was initially told she could not assume the loan. The servicer simply denied her request, even though the assumption process was legally possible. Undeterred, Kelly fought for her rights, advocating not just for herself but for her children.

After relentless persistence and a little outside intervention, she was finally informed that she could, in fact, assume the mortgage. Though the process is still ongoing, this victory means that Kelly’s children will be able to remain in their home, school and community, avoiding unnecessary upheaval.

But here’s the bigger issue: Kelly’s experience is far from unique. Many lenders themselves are unaware that mortgage assumptions are allowed, leading to misinformation and unnecessary denials. While some federally backed loans explicitly allow assumptions, conventional loans are often treated as though they cannot be assumed — even when Fannie Mae and Freddie Mac guidelines say otherwise. This lack of awareness creates major financial barriers for divorcing homeowners.

Had Kelly been forced to refinance instead of assuming the mortgage, the financial consequences would have been severe. Like many homeowners who secured their mortgages at lower interest rates, she would have been forced to refinance at today’s much higher rates, driving up her monthly payments by hundreds of dollars and costing tens of thousands more over the life of the loan. That kind of financial strain could have pushed her to sell the home entirely, displacing her and her children through no fault of her own.

This is exactly the kind of problem we need to fix. My bill, SB 0689, ensures that divorcing spouses in Maryland can assume an existing mortgage if they meet the necessary financial qualifications, preventing families from being forced into unnecessary and costly refinancing. Specifically, the bill:

1. Ensures that all home loans in Maryland, not already assumable, become assumable in cases of divorce — provided the assuming spouse meets the loan’s creditworthiness and income requirements.
2. Requires lenders to disclose assumption provisions in writing before a loan application is completed, ensuring borrowers know their rights upfront.
3. Mandates transparency and education among mortgage servicers to prevent misinformation and unnecessary roadblocks.

Like so many of the bills I’ve sponsored and passed, this one came directly from a constituent’s experience. My job as a legislator is to listen, to bring these issues to Annapolis, and to fight for solutions that make a real difference in people’s lives. I’m honored to be your voice and to champion policies that protect Maryland families.