Assumable loan platform Roam offers seller closing guarantee

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Roam, a platform that’s pioneered the process of helping homebuyers find and purchase a home with an assumable mortgage, introduced a closing guarantee Wednesday aimed at reassuring sellers about the additional complexity and time that might be needed to transfer their mortgage to a buyer.

The San Francisco-based company says closing times for transactions it’s involved in average 45 to 60 days from the time an offer is accepted until close of escrow, and that since launching in 2023 its never had a deal fail to close after a buyer has been approved.

But because many sellers aren’t familiar with the process of transferring their mortgage to a buyer, the Roam Seller Closing Guarantee can help make sellers more receptive to offers from buyers who want to assume their mortgage and strengthen the buyer’s offer in multiple offer situations, said Roam founder and CEO Raunaq Singh.

Raunaq Singh

Raunaq Singh

“We will close in 60 days, or we will pay (the seller’s monthly mortgage payments) for up to 60 days, ” Singh said. That way he said sellers who are looking to trade up or down aren’t making two mortgage payments, and “they have significantly more buyers.”

Roam, which announced a $1.25 million seed funding round in September, helps homebuyers search for homes with mortgages eligible for assumption and manages the process on behalf of buyers, sellers and agents, charging a 1 percent fee to buyers through closing costs.

Singh said that the experience Roam has gained working with servicers to help buyers assume the seller’s mortgage makes the company confident that it will be rare for it to have to make payments on the seller’s behalf. But the Roam Seller Closing Guarantee is an insurance policy for sellers who may have reservations.

For buyers, the appeal of assuming the mortgage that a seller took out when rates were near historic lows is obvious. Roam’s tagline on LinkedIn is “Wind back the clock and buy your next home today with a rate as low as 2 percent.”

In theory, any government-backed FHA, VA or USDA mortgage can be assumed by a qualifying borrower, and multiple listing services often have a “cash to existing loan” box that real estate agents can check to indicate an assumable loan. In practice, keyword searches on traditional listing search sites may turn up only a fraction of homes with assumable mortgages.

Roam helps buyers find homes with assumable mortgages with a slick search site that pulls data for individual homes showing how much lower their interest rate and monthly payment will be if they assume the seller’s mortgage. Search for homes in Atlanta, Georgia, for example, and Roam will pull up more than 100 results. A search for Atlanta homes on Zillow using the keyword “assumable” turns up less than 10.

Because buyers who want to assume a seller’s mortgage will also need to compensate them for whatever equity they’ve built up in their home, Roam will connect homebuyers who need a second mortgage to preferred partners.

To protect sellers in the event that the buyer has trouble paying the mortgage that they’ve assumed, Roam files for a release of liability of the loan when the mortgage transfers to the new buyer, removing the seller’s name from the note.

Currently serving Arizona, Colorado, Florida, Georgia and Texas and Florida, Singh said Roam plans to cover 80 percent of the U.S. by the end of the year.

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