Finance
A buyer assumes the seller's existing mortgage. The buyer is now primarily liable for the loan, but if the lender did not release the seller, the seller's exposure is described as:
APrimary liability
BSecondary (contingent) liability✓ Correct
CNo liability
DJoint and several liability with the lender
Explanation
When a buyer assumes a mortgage without the seller being released by the lender (novation), the seller retains secondary (contingent) liability — the seller is on the hook if the buyer defaults.
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