Where this was said
Brian in Dallas: The TikTok Loan Assumption Scam Exposed
At 1:08:33 · chapter starts 1:06:30
Brian wants to use a loan assumption to lock in a seller's lower interest rate 16 months before he plans to buy. Dave's immediate response: 'There's no such thing.' He then delivers a history lesson: fully assumable loans (FHA and HUD) existed without qualification in the 1970s, but due-on-sale clauses — specifically Fannie Mae paragraph 17 — killed them in the early 1980s. Any modern loan that appears to allow assumption actually requires full qualification and rate reset to current rates, meaning the lender prefers to just get paid off. The TikTok version — keeping the property in the seller's name via 'contract for deed' or a wraparound mortgage — is outright fraud. The buyer has no title, no insurance, and when the lender discovers the undisclosed transfer, they foreclose. Dave closes by declaring that 6% is historically low and that the real problem is affordability driven by income and savings, not interest rates.
Fully assumable loans disappeared in the early 1980s. Every modern mortgage has a due-on-sale clause that lets the lender call the entire loan the moment title transfers without their consent. The TikTok 'contract for deed' workaround is fraud: the buyer has no insurance, no title, no protection — and deserves the foreclosure that follows.
TikTok 'assumable loan' hacks are outright fraud — modern mortgage due-on-sale clauses let lenders call the full loan the moment they discover an undisclosed transfer.
