What can a lender do if a mortgage has been assumed?

When a mortgage is assumed by a buyer, the buyer takes on the responsibility for making the mortgage payments, but the original mortgagor may still be held liable under certain circumstances. If the buyer defaults on the mortgage and there is a deficiency—meaning the sale of the property does not cover the mortgage balance—the lender has the option to seek a deficiency judgment. This means the lender can sue either the buyer (the new mortgagor who assumed the mortgage) or the original mortgagor (the one who took out the loan initially).

This ability to sue either party for deficiency is essential because it allows lenders to recover any losses they incur if the foreclosure sale does not yield enough to satisfy the outstanding debt. This is particularly relevant in many jurisdictions where the lender has the right to pursue either borrower for the remaining balance after foreclosure.

In contrast, the other options listed do not accurately reflect the rights of the lender in the context of assumed mortgages. For instance, suing only the original mortgagor does not take into account the liability the buyer has assumed. Similarly, limiting the lender's actions to only foreclosing on the buyer would not provide recourse for any deficiency. Additionally, prohibiting communication between parties does not align with