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Business Definition for: assumption
Dictionary of Finance and Investment Terms
assumption

act of taking on responsibility for the liabilities of another party, usually documented by an assumption agreement. In the case of a mortgage assumption, the seller remains secondarily liable unless released from the obligations by the lender.

Dictionary of Banking Terms
assumption

mortgage clause stating the terms under which an existing mortgage or deed of trust may be conveyed to another party. Generally, a mortgage cannot be transferred at the same rate and terms without written consent of the lender.

See also assumable mortgage
Dictionary of Insurance Terms
assumption

acceptance by a reinsurer of part or all of a risk that has been transferred to it by a primary insurer or another reinsurer.

See also reinsurance , cede
Related Terms:
assumable mortgage

mortgage giving the borrower the right to assign the unpaid balance of his obligation, without prepayment penalty, to another person upon sale of the mortgaged property. The buyer assumes payment of the loan at the same rate and terms for the remainder of the mortgage, and the seller remains secondarily liable for the obligation. Department of Veterans Affairs mortgages and mortgages insured by the Federal Housing Administration are generally assumable by the buyer. Contrast with portable mortgage.

reinsurance

agreement in which one insurer indemnifies another insurer for all or part of the risk of a policy originally issued and assumed by that other insurer.

cede

to transfer a risk from an insurance company to a reinsurance company.

Referring Terms:
assumable mortgage
Copyright © 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2000, 1995, 1991, 1987 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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