assignment or transfer of real estate where the purchaser agrees to take over monthly payments of principal and interest, but does not assume personal liability for the obligation. If the purchaser defaults, the lender must attempt to collect the debt from the original borrower, through foreclosure on the property, or other means. The original mortgage remains intact, and property title is not passed on to the purchaser. Contrast with assumption.
condition of sale whereby the purchaser takes land encumbered by a preexisting mortgage. The purchaser's obligation to the mortgagee is limited to the property subject to the mortgage, unless the purchaser becomes personally liable on the debt by assuming the mortgage.
circumstance in which a buyer takes title to mortgaged real property but is not personally liable for the payment of the amount due. The buyer must make payments in order to keep the property; however, with default, only the buyer's equity in that property is lost. Contrast assumption of mortgage.
Example: Queen purchases a house from Parson subject to the existing mortgage. Parson's mortgage has an outstanding balance of $140,000 and the sales price is $160,000. Queen pays Parson $20,000 in cash and takes over the payments on the mortgage. Should Queen default, Parson is liable under the promissory note given to the lender.
