Subject to Mortgage


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Subject to Mortgage

An agreement in which the owner of real estate transfers to another party the right to use the property, in exchange for which the other party makes mortgage payments to the lender. Neither the property nor the legal obligation to make the payments transfers. This is a high risk endeavor for the owner: if the other party stops paying, the lender must collect from the current owner. However, the owner maintains title to the property.
References in periodicals archive ?
The community was previously owned subject to mortgage financing and is now leased by Emeritus Corp.
In addition, the company acquired seven skilled nursing facilities in Alabama and Washington with a total of 637 beds subject to mortgage loans totaling approximately $13.
With the continuation of a period of more stable mortgage market performance, the Company has made substantial progress on its plans to implement alternative investment activity not subject to mortgage prepayment risks and is continuing discussions and evaluations of several business combination proposals.
Moreover, the IRS's revenue rulings under section 4941 were inapposite because that section contains no definition of a sale or exchange; the only definition in the pertinent Code provisions is found in section 4975(f)(3) - and it only encompasses transfers subject to mortgages or liens.
As additional consideration, SRG will transfer to AMIN all of its five real estate properties owned by SRG, subject to mortgages and related liabilities of approximately $1,300,000.
The properties had a net book value of approximately Cdn$22 million and were subject to mortgages aggregating approximately Cdn$18 million.