A party not obligated on a loan agrees to voluntarily be obligated on the loan and complete the terms of the former borrowers’ loan agreement. This typically occurs after the property is transferred or sold and the mortgage is agreed to be assumed by the buyer/assignee of the property. Most commonly seen in inheritance situations.
The private lender agreed to the assumption of the mortgage by the borrower, enabling them to take over the existing loan while maintaining the same favorable terms established by the previous property owner.