Final answer:
When property is sold with a mortgage, the new owner or property buyer becomes primarily responsible for the mortgage repayment. They continue making payments on the loan, which may or may not be an existing mortgage transferred to them.
Step-by-step explanation:
When property is sold subject to a mortgage, the person primarily responsible for repayment is the property buyer or new owner. This means that, although the original borrower (the seller) remains on the contract and could be liable if the new owner defaults, the person who assumes ownership of the property is responsible for continuing the mortgage payments under the terms agreed with the lender. In some cases, the original loan may be assumable, allowing the new owner to take over the existing mortgage terms directly. Otherwise, a new mortgage may be created for the buyer.
In the context of bank assets and mortgages, it's essential to understand the roles of the primary loan market and the secondary loan market. The primary loan market is where financial institutions make loans to borrowers, such as when issuing a home loan. The secondary loan market consists of transactions where these home loans are sold to other banks or financial institutions, which then collect the loan payments.