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Seller borrowed $500,000 from Bank, signed a note, and gave Bank a mortgage on Blackacre. Seller then sold Blackacre to Buyer by a deed stating that Buyer "takes title subject to Bank's mortgage." Buyer did not sign the note or promise Seller or Bank to pay the debt. One year later, Buyer sold Blackacre to Investor by a deed stating that Investor "assumes and agrees to pay Bank's mortgage debt." Bank knew about both conveyances but never signed a release of Seller.
Investor defaulted. Bank foreclosed, bought Blackacre at a properly conducted sale for $430,000, and seeks a deficiency for the unpaid balance. Seller, Buyer, and Investor each deny personal liability. Buyer argues that Bank's only remedy was against the land because Buyer took title subject to the mortgage. Investor argues that Bank was not a party to the deed containing the assumption clause.
Discuss the parties' liability. Address the effect of taking subject to a mortgage, assumption of a mortgage, Seller's continuing liability, Bank's foreclosure remedy, and who may be liable for any deficiency.