Which statement is true about a sale of land subject to mortgage when the buyer takes 'subject to'?

Which statement is true about a sale of land subject to mortgage when the buyer takes 'subject to'?

• A. Buyer is personally liable for the mortgage
• B. Seller is personally liable for the mortgage
• C. Mortgage remains on land
• D. Mortgagee may foreclose on the buyer

Answer: (C)

When a buyer takes land “subject to” the mortgage, the loan stays tied to the property rather than becoming a personal obligation of the buyer. The mortgage remains a lien on the land, so the property continues to be encumbered by that loan even after the transfer. The seller remains personally liable on the mortgage note, but the buyer is not personally liable to the lender unless there is an explicit assumption or new agreement. The lender’s remedy is to foreclose on the property if payments aren’t made, not to sue the buyer personally. So the statement that the mortgage remains on the land correctly captures the result of a subject-to transfer.

When a buyer takes land “subject to” the mortgage, the loan stays tied to the property rather than becoming a personal obligation of the buyer. The mortgage remains a lien on the land, so the property continues to be encumbered by that loan even after the transfer. The seller remains personally liable on the mortgage note, but the buyer is not personally liable to the lender unless there is an explicit assumption or new agreement. The lender’s remedy is to foreclose on the property if payments aren’t made, not to sue the buyer personally. So the statement that the mortgage remains on the land correctly captures the result of a subject-to transfer.