Contracts
In Ohio, a 'novation' in a real estate loan assumption occurs when:
AThe buyer simply takes over payments without the lender's involvement
BThe lender agrees to release the original borrower from liability and substitute the new borrower✓ Correct
CThe original borrower remains liable even after the assumption
DThe property is refinanced at a new rate
Explanation
A novation in loan assumption is when the lender releases the original borrower from personal liability on the loan and substitutes the new borrower as the sole obligor — effectively replacing the old contract with a new one.
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