| A "Subject To" transaction is one in which
the buyer purchases the property and the existing
mortgage is not paid off at the time of closing.
The lender does not consent to the transaction, the
buyer does not assume the existing loan (s) and the
seller remains as the borrower on the existing loan (s).
The property, however, remains encumbered by the
lender's trust deed or mortgage and hence, the buyer is said to be
taking title to the property "subject to" the existing
loan, trust deed or mortgage.
The buyer must make the payments, either directly or
indirectly, on the existing loan (s) (trust deed or
mortgage) or risk foreclosure
of the property. Buyers sometimes take title "subject
to" more than one existing loan, trust deed or
mortgage.
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