In one sentence
The paired documents transferring a loan or contract to a new party who takes on its obligations.
The longer version
When a loan or key contract moves to a new party, an assignment transfers the rights and an assumption binds the new party to the duties. Loan assumptions on property sales run through exactly this mechanism.
These documents appear in assumptions, participations, and correspondent table-funding, wherever obligations change hands.
Common questions
- What is an assignment and assumption agreement?
- A pair of transfers documented together: one party assigns its rights under a loan or contract, and the new party assumes the obligations that come with them.
- Where is assignment and assumption used in lending?
- In loan assumptions by a property buyer, in transfers of contracts on a sale, and in some loan sales or table-funded closings.
- Does an assignment and assumption release the original party?
- Not automatically. A release has to be granted expressly, often by the lender or counterparty.
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