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MORTGAGE ASSUMPTION AGREEMENT
THIS MORTGAGE ASSUMPTION AGREEMENT (hereinafter referred to as the
"Agreement") made and entered into as of this ___________(1)_________ day of ______(2)
_____, _________(3)________, by and between ____________(4)___________, of
____________(5)_______________, (hereinafter referred to as the "Lender") and __________
(6)_______________, of __________(7)_______________ (hereinafter referred to as
W I T N E S S E T H:
WHEREAS, Lender is the holder and owner of the following documents (hereinafter
sometimes collectively referred to as the "Loan Documents"):
1. Mortgage Note dated ________(8)___________, in the original principal face amount
of _________(9)___________ DOLLARS ($___________________) executed and delivered by
__________(10)__________ (hereinafter referred to as the "Original Borrower") in favor of
Lender (hereinafter referred to as the "Note"); and,
2. Mortgage given by Original Borrower as "Mortgagor" to Lender as "Mortgagee" dated
_____________(11)____________, which Mortgage is recorded on the Public Records of ___
(12)__________ County, _____________(13)_____________ at O.R. Book __________(14)
__________, Page _________(15)__________ (hereinafter referred to as the "Mortgage"), and
which Mortgage encumbers the real property as described therein; and,
WHEREAS, the Original Borrower is desirous of conveying the property encumbered by
the Mortgage, (hereinafter referred to as the "Property") to Borrower; and,
WHEREAS, the Borrower desires to receive said Property and formally assume the
Mortgage and perform all of the covenants and conditions contained in the Mortgage Note, the
Mortgage and all other Loan Documents as partial consideration for its purchase of the Property
and as consideration for the Lender's willingness to consent to the sale of the Property which is
encumbered by the Loan Documents; and,
WHEREAS, the Mortgage expressly prohibits the conveyance of the Property without the
express written consent of the Lender; and,
WHEREAS, the Lender is unwilling to give its consent to the transfer of the Property to
the Borrower unless the Borrower shall assume all of the obligations heretofore imposed by the
Loan Documents upon the Original Borrower;
NOW, THEREFORE, for and in consideration of the sum of TEN DOLLARS ($10.00) and
in consideration of the Premises and of the mutual covenants contained herein, and for other
good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged
by the parties, the parties hereto agree as follows:
1. Assumption. Borrower expressly assumes the Loan Documents and agrees to perform
all covenants, conditions, duties and obligations contained therein and agrees to pay the Note
and the obligations evidenced thereby in a prompt and timely manner in accordance with the
2. Consent to Conveyance. Lender hereby consents to the transfer of the Property to the
Borrower, but the Lender expressly reserves the right to withhold its consent to any future sale or
transfer of the Property, as provided for in the Mortgage.
3. Warranties and Representations. Borrower affirms, warrants, represents and
covenants that Borrower has no defenses nor rights of set-off against Lender or against the
payment, collection or enforcement of the indebtedness evidenced by the Note and secured by
the Mortgage and owed to Lender. Borrower further warrants and represents as follows:
a. Borrower has done no acts nor omitted to do any act which might prevent Lender
from, or limit Lender in, acting upon or under any of the provisions herein, in the Mortgage, in the
Note or any other Loan Documents;
b. Borrower is not prohibited under any other agreement with any other person or any
judgment or decree, from the execution and delivery of this Agreement, the performance of each
and every covenant hereunder or under the Mortgage, Note or any other Loan Documents;
c. No action has been brought or threatened which would in any way interfere with the
right of Borrower to execute this Agreement and perform all of Borrower's obligations contained
herein, in the Note, in the Mortgage, or in any other Loan Document;
d. All financial statements of Borrower and Guarantors, if any, are true and correct in all
respects, fairly present the respective financial conditions of the subjects thereof, as of the
respective dates thereof and no material adverse change has occurred that would affect
Borrower's or Guarantors', if any, ability to repay the indebtedness evidenced by the Note and
secured by the Mortgage;
e. Borrower is duly formed, validly existing and in good standing under the laws of the
State of _____________(16)_____________ and has full power and authority to consummate
the transactions contemplated under this Agreement.
4. Acknowledgements. Borrower acknowledges that:
a. The Loan Documents are in full force and effect; and,
b. The principal balance of the loan as represented by the aforesaid Note as of the date
of this Agreement is ________________(17)________________ DOLLARS
($___________________) and principal and interest are unconditionally due and owing to the
Lender as provided in the Note.
5. Costs. Borrower shall pay all costs of the assumption made hereby, to include without
limitation, attorneys' fees and recording costs, as well as the cost of an endorsement to Lender's
title insurance policy insuring the lien of the Mortgage after the recording of this Agreement. Such
costs shall be due at closing hereunder and the payment thereof shall be a condition precedent
to Lender's consent to the transfer of the Property to Borrower. In the event that it is determined
that additional costs relating to this transaction are due, Borrower agrees to pay such costs
immediately upon demand.
6. Assumption Fee. In consideration of Lender's consenting to the conveyance of the
Property to the Borrower, Lender is entitled to, and has earned, an assumption fee in the amount
of _(18)_ percent (___%) of the original principal face amount of the indebtedness evidenced by
the Note. Said fee shall be due and payable upon the execution and delivery of this Agreement.
Borrower hereby agrees and acknowledges that said fee is being charged solely for costs relating
to the assumption of the Mortgage and not as interest for the forbearance or use of money.
7. Recordation. The recording of this Agreement on the Public Records shall evidence
the closing of the transaction described herein.
8. Paragraph Headings. The paragraph headings used herein are for convenience of
reference only and shall not be used in the interpretation or construction hereof.
9. Governing Law. This Agreement shall be governed, interpreted and construed by,
through and under the laws of the State of _____________________(19)______.
10. Time of the Essence. Time is of the essence of this Agreement.
11. Attorneys' Fees. All costs incurred by Lender in enforcing this Agreement and in
collection of sums due Lender from Borrower, to include, without limitation, reasonable attorneys'
fees through all trials, appeals, and proceedings, to include, without limitation, any proceedings
pursuant to the bankruptcy laws of the United States and any arbitration proceedings, shall be
paid by Borrower.
12. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the
parties hereto as well as their successors and assigns, heirs and personal representatives.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
As to Lender this ___________(20)______ day of __________________(21)___________,
As to Borrower this (20) day of _______________(21)_____________, ________(22)________.
STATE OF ________________(26)_________)
COUNTY OF ______________(27)_________)
THE FOREGOING instrument was acknowledged before me this (28) day of _______
(29)________________, ______________(30)__________, by ________(31)________.
My Commission Expires: _________________
STATE OF _________________(26)___________________)
COUNTY OF ______________(27)________)
THE FOREGOING instrument was acknowledged before me this __________(28)
______ day of __________(29)____________, __________(30)________, by
My Commission Expires: _________
The information in this document is designed to provide an outline that you can follow
when formulating business or personal plans. Due to the variances by many local, city, county
and state laws, we recommend that you seek professional legal counseling before entering into
any contract or agreement.