A mortgagor would be released from the liability of the mortgage when there is...

A mortgagor would be released from the liability of the mortgage when there is...

• A. An alienation of the mortgage.
• B. A sale subject to the mortgage.
• C. A sale subject to the other.
• D. An assumption and a novation.

Answer: (D)

In the context of mortgages, the release of liability for a mortgagor occurs through an assumption and novation. When a buyer assumes a mortgage, they take over the responsibility for making payments on that loan. However, simply assuming the mortgage does not automatically relieve the original mortgagor of their liability; that requires novation. Novation involves a legal process where the original contract is replaced by a new one, which transfers the obligation to the new borrower completely. This means that the lender agrees to release the original mortgagor from all future liability associated with the mortgage. Thus, through this process, the original mortgagor is no longer responsible for the mortgage debt, and the new borrower becomes solely liable. The other options do not provide the necessary legal mechanism for releasing the mortgagor from their loan obligation. Options that mention a sale subject to the mortgage typically keep the original mortgagor liable for the debt, as there is no formal agreement releasing them from responsibility.

In the context of mortgages, the release of liability for a mortgagor occurs through an assumption and novation. When a buyer assumes a mortgage, they take over the responsibility for making payments on that loan. However, simply assuming the mortgage does not automatically relieve the original mortgagor of their liability; that requires novation.

Novation involves a legal process where the original contract is replaced by a new one, which transfers the obligation to the new borrower completely. This means that the lender agrees to release the original mortgagor from all future liability associated with the mortgage. Thus, through this process, the original mortgagor is no longer responsible for the mortgage debt, and the new borrower becomes solely liable.

The other options do not provide the necessary legal mechanism for releasing the mortgagor from their loan obligation. Options that mention a sale subject to the mortgage typically keep the original mortgagor liable for the debt, as there is no formal agreement releasing them from responsibility.