Finance
A New Mexico buyer wants to assume an existing FHA loan. The lender's role in this situation is to:
AAutomatically allow assumption with no documentation
BQualify the assuming buyer to ensure they meet creditworthiness requirements✓ Correct
CRequire full payoff of the existing loan
DCharge a prepayment penalty
Explanation
FHA loans originated after December 1, 1986 are assumable, but the assuming buyer must be qualified by the lender. FHA will not release the original borrower from liability unless the new buyer is qualified.
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