The Mortgage Assumption Contract is a crucial document used in Philippine real estate transactions when a new party wishes to take over an existing mortgage from the original borrower. This arrangement, governed by Philippine civil law and banking regulations, allows for the transfer of mortgage obligations while maintaining the original loan terms. The document is particularly relevant in situations where selling a property with an existing mortgage, especially when the current mortgage terms are favorable or when the assuming party wishes to avoid new loan origination costs. The contract must comply with requirements set forth by the Bangko Sentral ng Pilipinas (BSP) and include specific provisions required under Philippine property and contract law. It typically requires the explicit consent of the lending institution and must address various aspects such as payment terms, property transfer, and the release of the original mortgagor from future obligations.
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Key Requirements PROMPT example:
Mortgage Assumption Contract
"I need a Mortgage Assumption Contract for a residential property in Manila, Philippines, where my client is taking over an existing mortgage from a family member, with the transfer to be completed by March 2025."
1. Parties: Identifies and provides full details of the Original Mortgagor (Seller), the Assuming Party (Buyer), and the Mortgagee (Lender)
2. Background: Recitals explaining the existing mortgage, property details, and the intention to transfer the mortgage obligations
3. Definitions: Defines key terms used throughout the agreement, including Property, Original Mortgage, Outstanding Balance, and Assumption Date
4. Assumption of Mortgage: Core agreement where the assuming party takes over the mortgage obligations and the original mortgagor's rights and responsibilities
5. Purchase Price and Payment Terms: Details of any equity payment to the original mortgagor and future payment obligations
6. Representations and Warranties: Statements by all parties regarding their capacity, authority, and the status of the mortgage and property
7. Mortgagee's Consent: Express consent of the lender to the mortgage assumption and any conditions attached
8. Transfer of Rights and Obligations: Detailed provisions regarding the transfer of all mortgage-related rights and responsibilities
9. Release of Original Mortgagor: Terms of release of the original mortgagor from future obligations
10. Governing Law and Jurisdiction: Specifies Philippine law as governing law and jurisdiction for disputes
11. Execution: Signature blocks and notarization requirements
1. Co-Assumers: Required when there are multiple parties assuming the mortgage together
2. Property Management: Needed when there are specific arrangements for property management during transition
3. Insurance Requirements: Include when there are specific insurance transfer or new policy requirements
4. Default Provisions: Additional default terms beyond those in the original mortgage
5. Due-on-Sale Clause Waiver: Required when the original mortgage contains a due-on-sale clause that needs to be addressed
6. Broker Provisions: Include when real estate brokers are involved in the transaction
1. Schedule A - Property Description: Detailed legal description of the mortgaged property
2. Schedule B - Original Mortgage Details: Copy or summary of the original mortgage agreement including payment schedule
3. Schedule C - Outstanding Balance Statement: Current mortgage balance and payment history
4. Schedule D - Payment Schedule: New payment schedule if terms are modified
5. Appendix 1 - Required Documents: List of all documents required for the mortgage assumption process
6. Appendix 2 - Consent Documents: Copies of all required consent forms from the mortgagee
7. Appendix 3 - Property Inspection Report: Current condition assessment of the property if required by the mortgagee
Authors
Relevant legal definitions
Agreement
Assumption Date
Assuming Party
Assumption Fee
Closing Date
Consent
Default
Effective Date
Encumbrances
Equity Payment
Existing Mortgage
Interest Rate
Lender
Loan Documents
Material Adverse Change
Maturity Date
Monthly Payment
Mortgage
Mortgaged Property
Original Mortgagor
Outstanding Balance
Parties
Payment Schedule
Principal Amount
Property
Purchase Price
Release
Security
Title
Transfer Date
Transfer Documents
Transfer Fee
Assumption Date
Assuming Party
Assumption Fee
Closing Date
Consent
Default
Effective Date
Encumbrances
Equity Payment
Existing Mortgage
Interest Rate
Lender
Loan Documents
Material Adverse Change
Maturity Date
Monthly Payment
Mortgage
Mortgaged Property
Original Mortgagor
Outstanding Balance
Parties
Payment Schedule
Principal Amount
Property
Purchase Price
Release
Security
Title
Transfer Date
Transfer Documents
Transfer Fee
Clauses
Parties
Recitals
Definitions
Assumption of Mortgage
Transfer of Rights
Purchase Terms
Payment Obligations
Lender's Consent
Representations and Warranties
Conditions Precedent
Property Transfer
Release of Original Mortgagor
Insurance
Default
Remedies
Notice
Assignment
Amendment
Severability
Entire Agreement
Governing Law
Dispute Resolution
Force Majeure
Costs and Expenses
Indemnification
Compliance with Laws
Property Maintenance
Registration and Recording
Counterparts
Notarization
Recitals
Definitions
Assumption of Mortgage
Transfer of Rights
Purchase Terms
Payment Obligations
Lender's Consent
Representations and Warranties
Conditions Precedent
Property Transfer
Release of Original Mortgagor
Insurance
Default
Remedies
Notice
Assignment
Amendment
Severability
Entire Agreement
Governing Law
Dispute Resolution
Force Majeure
Costs and Expenses
Indemnification
Compliance with Laws
Property Maintenance
Registration and Recording
Counterparts
Notarization
Relevant Industries
Banking & Finance
Real Estate
Legal Services
Insurance
Property Development
Mortgage Lending
Financial Services
Residential Property
Commercial Property
Relevant Teams
Legal
Real Estate
Mortgage Operations
Credit Risk
Compliance
Property Management
Financial Operations
Document Processing
Title and Escrow
Loan Servicing
Relevant Roles
Mortgage Loan Officer
Real Estate Attorney
Property Manager
Real Estate Broker
Bank Manager
Credit Risk Officer
Real Estate Developer
Financial Advisor
Legal Counsel
Compliance Officer
Property Assessor
Title Officer
Mortgage Underwriter
Real Estate Investment Manager
Find the exact document you need
Mortgage Assumption Contract
A Philippine law-governed agreement facilitating the transfer of mortgage obligations from an original borrower to an assuming party, with lender consent and regulatory compliance.
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