Question

11. A buyer "assumes mortgage" in purchasing land from seller. Later the mortgage payments are not

made. Select or mark the one best answer.
The seller is completely released from making any payments to the mortgagee.
b. Mortgagee can sue either or both buyer and seller, and seek foreclosure
C. Mortgagee can only sue the seller.
a.

Answer 1

If a buyer assumes a mortgage and fails to make payments, the lender can sue either or both the buyer and seller and seek foreclosure.

Step-by-step explanation:

When a buyer assumes a mortgage in purchasing land from a seller, and later fails to make the mortgage payments, the situation is not as straightforward as a complete release of the seller's obligation to pay. According to the law, option 'b' is most likely the correct answer. The mortgagee (lender) can sue either the buyer or seller, or both, and seek foreclosure of the property. This is because when a mortgage is assumed by a buyer, the original seller may still be liable unless a 'novation' agreement (a new contract replacing the old one) is reached that explicitly releases the seller from the mortgage debt.