Assumption of Mortgage

Assumption of Mortgage means:
the taking upon oneself of a mortgagor's obligations toward a mortgagee, generally as part of the purchase price of a parcel of real estate. By assuming the mortgage rather than taking subject to it, the purchaser becomes personally liable for the debt. The seller is not relieved of the obligation, however, unless the lender agrees to do so in a novation. Many lenders reserve the right to approve mortgage assumptions; often they require points or increase the face rate of interest. Relief from debt by assumption of a mortgage may be considered receipt of boot and cause a transaction that is part of an otherwise nontaxable transaction (e.g., a nontaxable exchange or a reorganization) to be taxable.