Final answer:
An Assumption is a real estate term where both the buyer and seller may be liable for the repayment of a debt, as the buyer assumes the seller's mortgage but the seller may remain liable if the buyer defaults.
Step-by-step explanation:
When the seller and buyer are both liable for the repayment of a debt, this situation is known as an Assumption. In real estate transactions, an assumption occurs when a buyer takes over, or "assumes", the seller's mortgage, meaning they take on the responsibility for the existing loan. However, in some cases, the original seller may remain liable if the new borrower defaults on the loan, this is known as a "non-qualifying assumption" where the lender has not formally released the original borrower from liability.