24 C.F.R. § 235.206 Substitute mortgagors.
Title 24 - Housing and Urban Development
(a) Selling mortgagor. The mortgagee may effect the release of a mortgagor from personal liability on the mortgage note only if it obtains the Commissioner's approval of a substitute mortgagor, as provided under this section. The Commissioner may release a mortgagor from personal liability on any second mortgage note it holds in connection with its approval of a substitute mortgagor under this section. (b) Purchasing mortgagor. The Commissioner may approve a substitute mortgagor with respect to any mortgage insured under this part only if the mortgagor is to occupy the dwelling as a principal residence (as defined in §203.18(f)(1) of this chapter) and only if the mortgagor meets all applicable requirements of this part. (c) Applicability—current mortgagor. Paragraph (b) of this section applies to the Commissioner's approval of a substitute mortgagor only if the mortgage executed by the original mortgagor met the conditions of §203.258(c) of this chapter. (d) Applicability—earlier mortgagor. The occupancy and similar requirements set forth in §203.258(d) of this chapter apply to mortgages insured under subpart A of this part. (e) Definition. As used in this section, the term substitute mortgagor includes: (1) Persons who, upon the release by a mortgagee of a previous mortgagor from personal liability on the mortgage note, assume this liability and agree to pay the mortgage debts; and (2) Persons who purchase without assuming liability on the mortgage note, or purchase where no release is given by the mortgagee to the previous mortgagor. [55 FR 34814, Aug. 24, 1990]
Title 24: Housing and Urban Development
PART 235—MORTGAGE INSURANCE AND ASSISTANCE PAYMENTS FOR HOME OWNERSHIP AND PROJECT REHABILITATION
Subpart B—Contract Rights and Obligations—Homes for Lower Income Families
§ 235.206 Substitute mortgagors.
