Successors in Interest: Be Prepared to Treat a Non-Borrower like a Borrower
ABA Banking Compliance Magazine
Most banks and mortgage servicers have long been familiar with the concept of a "successor in interest." Whether it was because of the due-on-sale protections afforded to some types of real property transfers throuh the Garn-St. Germain Act of 1982, or through more recent policy and procedure requirements, mortgage servicers are often confronted with situations where individuals acquire all or a portion of a borrower's ownership interest in the real property that secures a mortgage loan. Traditionally, and perhaps most frequently, this has been someone who acquires an ownership interest in a borrower's property as a result of the borrower's death.
The complete article first appeared in the January/February Issue of ABA Banking Compliance magazine.