ASSUMPTION
The undertaking of the repayment of a debt or the
performance of an obligation owed by another.
When a purchaser of real property assumes
the mortgage of the seller, he or she agrees to
adopt the mortgage debt, becoming personally
liable for its full repayment in case of default. If
a foreclosure sale of the mortgaged property
does not satisfy the debt, the purchaser remains
financially responsible for the outstanding bal-
ance.
In contrast, a purchaser who takes subject to
the seller’s mortgage agrees to repay the mort-
gage debt, but that person’s liability is limited
only to the amount that the mortgaged property
is sold for in the case of foreclosure. If the prop-
erty is sold for less than the mortgage debt, the
mortgagee must seek the remaining balance due
from the seller, the original mortgagor
