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 ?
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.