Escrow & Title
A Pennsylvania homebuyer is purchasing a property with an existing mortgage. At closing, the existing mortgage must be:
AAssumed by the buyer automatically
BPaid off with a portion of the sale proceeds and a satisfaction of mortgage recorded✓ Correct
CTransferred to the buyer's name without any payoff
DKept in the seller's name but subordinated to the buyer's new mortgage
Explanation
Unless the buyer is assuming the existing mortgage (with lender approval), the seller's mortgage must be paid off at or before closing, and a satisfaction of mortgage (or release of lien) must be recorded to clear the buyer's title. Title insurance requires the seller's liens to be discharged.
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