Escrow & Title
A NH property is sold subject to an existing first mortgage. The buyer 'assumes' the mortgage. This means:
AThe original borrower is automatically released from liability
BThe buyer takes over personal liability for the mortgage payments, though the original borrower may remain secondarily liable unless released by the lender✓ Correct
CThe lender must approve the assumption but cannot require qualification
DThe mortgage is automatically refinanced in the buyer's name
Explanation
When a buyer assumes a mortgage, they accept personal liability for the loan payments. However, unless the lender formally releases the original borrower (novation), the original borrower remains secondarily liable. Most conventional loans have due-on-sale clauses that require the buyer to qualify for assumption.
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