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Taking property subject to a mortgage means that the buyer
pays the seller for the latter's redemption interest, i.e.,
the difference between the amount of the mortgage debt and
the total amount for which the property is being sold, but
the buyer does not assume a personal obligation to pay the
mortgage debt. The buyer agrees that as between him and the
seller, the latter has no obligation to satisfy the mortgage
debt, and that the debt is to be satisfied out of the
property. Although he is not obliged to, the buyer will
ordinarily make the payments on the mortgage debt in order
to protect his interest in the property.
See also Voight v. Commissioner, 68 T.C. 99 (1977), affd. per
curiam 614 F.2d 94 (5th Cir. 1986); Andrews v. Robertson, 170 P.
1129 (Cal. 1918); Wolfert v. Guadagno, 20 P.2d 360 (Cal. Dist.
Ct. App. 1933); Osborne, Handbook on the Law of Mortgages, sec.
252 (2d ed. 1970). The facts as established in this record are
consistent with petitioners’ having transferred the Danville
property to Haq subject to petitioners’ mortgage on the
property.6
Petitioners direct us to other irregularities and
unexplained circumstances regarding the Danville property,
including delays in the recording of the grant deed and of
various other documents, and the declaration of a presumptively
too-small amount of transfer tax on the grant deed conveying the
6 For instance, included in the record as petitioners’
exhibit 55 is a memorandum from Prudential Home Mortgage Co. to a
representative of Haq with regard to a mortgage on the Danville
property. The memorandum identifies petitioner husband as the
mortgagor. The memorandum advises Haq’s representative that
Prudential Home Mortgage Co. has paid delinquent taxes on the
Danville property and seeks, inter alia, reimbursement from Haq’s
representative in order to release the property from foreclosure.
Such a communication to Haq’s representative would be consistent
with petitioners’ having transferred the property to Haq subject
to the mortgage.
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