Elena Bailey takes title to the property and makes payments on the existing mortgage, but the original borrower remains the party primarily liable on the note. How is the purchase structured?
Correct Answer
B) Purchase subject to an existing loan
Purchase subject to an existing loan is correct because the facts match a transaction in which the buyer takes title but does not become personally liable on the existing note, which remains in the seller's name. That is the best description of the relationship, right, or legal concept tested here.
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