Finance
What is 'subject to' sale versus 'assumption' in Hawaii mortgage transactions?
AA. They are identical; both involve the buyer taking over the seller's mortgage
BB. In a 'subject to' sale, the buyer takes title without formally assuming the loan—the seller's name stays on the mortgage; in an assumption, the buyer formally takes personal liability for the loan✓ Correct
CC. Assumptions are always permitted by lenders; 'subject to' sales require lender approval
DD. 'Subject to' sales are legal in Hawaii; assumptions are not recognized
Explanation
A 'subject to' sale transfers title to the buyer, with the buyer making mortgage payments, but the seller's name remains on the loan and the seller retains personal liability. An assumption formally substitutes the buyer as the borrower (with lender approval), releasing the seller. 'Subject to' sales risk triggering the due-on-sale clause, and the seller remains liable if the buyer defaults.
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