Final answer:
The property has been sold subject to the mortgage, meaning the buyer assumes responsibility for the existing loan payments, and the loan itself is a bank asset that can have its value measured on the secondary loan market.
Step-by-step explanation:
When a buyer purchases a property with an existing loan and agrees to be personally obligated for the payment of the debt, the property has been sold subject to the mortgage. This means the buyer is taking over the debt associated with the property and is now responsible for the mortgage payments. A mortgage loan is essentially a bank asset, as it represents a legal obligation from the borrower to make payments over time. The value of a mortgage loan can be measured by what another party in the market is willing to pay for it. Loans can be readily bought and sold in the secondary loan market, differentiating them from the primary loan market, where loans are originally made to borrowers.