Escrow & Title
A Mississippi property is purchased and the buyer takes title subject to an existing deed of trust that was not paid off at closing. The original borrower (seller) should know they:
AAre fully released from mortgage liability since title transferred
BRemain personally liable on the mortgage note even though the buyer now owns the property — if the buyer defaults, the lender can pursue the seller✓ Correct
CHave no further obligations to the lender
DAre only responsible for the first 12 months after sale
Explanation
In a 'subject to' transaction, the seller does not get a release from the mortgage note — the seller remains personally liable for the debt. If the buyer (who now owns the property) stops making payments, the lender can foreclose AND pursue the original seller (former borrower) for any deficiency.
Related Mississippi Escrow & Title Questions
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