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Definition for

Subject-to Mortgage

A purchase arrangement whereby the buyer of a parcel of real property agrees that a mortgage against the property to be purchased shall be permitted to remain a lien upon sale. Unlike a loan assumption, the subject-to buyer does not become personally liable on the underlying debt. However, the buyer does assume the risk of the consequence of non-payment of the debt (foreclosure) by the seller. Compare loan assumption and wrap-around financing.

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