When purchasing a property subject to a mortgage, what is the buyer's liability?

When a buyer purchases a property subject to an existing mortgage, the liability structure primarily depends on how the transaction is structured. Choosing the option that states the original mortgagor can still be sued reflects a fundamental understanding of mortgage law.

In a situation where a buyer purchases a property "subject to" an existing mortgage, the buyer takes over the property while the original mortgagor remains responsible for the mortgage debt. This means the mortgage itself stays in the original mortgagor's name, and if payments are not made, the lender can pursue the original borrower for the debt, including auctioning the property through foreclosure if necessary. Essentially, the lender retains a claim against the original mortgagor in the event of default, allowing legal action to be taken against them.

This aspect highlights the distinction in responsibilities after the purchase. The buyer may not be personally liable for the mortgage debt unless they formally assume the mortgage. As a result, the original mortgagor still carries the obligation, making it accurate to say that they can be sued by the lender for any defaults that occur post-sale.

The other options don't accurately reflect the implications of purchasing property subject to a mortgage. The buyer typically isn't personally liable for the mortgage debt unless they