Mortgage Assumption Rules in Divorce: Margo Cook Testifies Before Lawmakers
Margo testified in support of a bill that proposes changes to mortgage assumption rules for divorcing homeowners.
In February 2025, Margo Cook, President of Wealth and Engagement Planning at Rothschild Capital Partners, testified before the Maryland General Assembly in support of House Bill 1018 and Senate Bill 689, which propose changes to mortgage assumption rules for divorcing homeowners. An assumption is when one individual in a joint debt takes over that debt solely as their own, with existing debt terms in place, including the interest rate.
The bills, introduced by Delegate Andrew Pruski (HB 1018) and Senator Dawn Gile (SB 689), would require mortgage lenders, banks, and credit unions to permit the assumption of a mortgage by divorcing individuals, provided the assuming borrower meets the lender’s financial qualification requirements. The legislation also mandates that lenders disclose this assumption provision in writing to loan applicants before completing a mortgage application.
During the testimony, Margo shared insights from her experience working with divorcing individuals, specifically the challenges they face when trying to assume a mortgage after a divorce.
“Through my work, I have seen first hand the financial challenges that individuals—particularly those navigating the complexities of divorce—face when seeking to assume a mortgage on their marital home,” Margo said while testifying. “Over the past several years, interest rates have risen dramatically. Many divorcing homeowners have low interest rate mortgages, and refinancing at today’s higher rates could impose significant financial hardship,” she said.
“Preserving existing mortgage terms may help some individuals remain in their homes rather than being forced to relocate. For parents, the impact is even greater, as keeping the family home often means preserving stability for their children—allowing them to stay in the same school district, maintain social networks, and remain in a familiar and supportive environment.”
This issue affects many Americans. According to Forbes, 53.4% of people divorced in 2022 co-owned their homes.[1] The Chief Economist of Apollo Global Management recently wrote that rising home prices and high mortgage rates have pushed the median age of homebuyers to a record-high 56 years old in 2024, up from 45 in 2021 and 31 in 1981.[2] This underscores the importance of the availability of the assumption mechanism in divorce.
Margo noted before the Maryland General Assembly that homeowners attempting to assume a mortgage often encounter structural hurdles in the lending system. A key aspect of the legislation is its retroactive application, which would extend these provisions to existing mortgage holders, not just new borrowers. The intent behind this provision is to assist individuals currently going through a divorce who may be affected by rising interest rates.
The bills do not require lenders to approve unqualified applicants. “Lenders would still retain discretion to deny an assumption if the borrower does not meet the necessary financial criteria,” Margo emphasized. “The legislation is designed to remove unnecessary barriers and increase transparency in the mortgage assumption process.”
Rothschild Capital Partners is available to present at your conference or event on these topics and more. Please reach out via connect@rothcap.com, if you wish to invite us to speak.
For more on our Divorce Wealth Planning practice, click here.
Footnotes
[1]Christy Bieber, Revealing Divorce Statistics in 2025, Forbes, https://www.forbes.com/advisor/legal/divorce/divorce-statistics/#sources_section (Nov. 20, 2024).
[2]Dr. Torsten Slock, Median Age of Homebuyers: 56, Apollo Global Management, https://www.apolloacademy.com/median-age-of-homebuyers-56/ (Feb. 21, 2025).
