Under what circumstance can a seller be released from mortgage liability?

A seller can be released from mortgage liability under the circumstance of a mutual agreement in writing between the parties involved. This typically occurs in situations where both the buyer and seller wish to alter the terms of their original agreement, possibly including the release of the seller from personal liability for the mortgage. This written consent serves as a formal acknowledgment that the seller is no longer responsible for the loan, which can be critical in protecting their interests should the buyer default.

This option reflects the importance of clear communication and documentation in real estate transactions, as both parties must agree to the release for it to be legally binding. It ensures that all parties clearly understand their rights and obligations moving forward. Other circumstances, such as the approval of the buyer's credit or the assumption of the loan without further documentation, may not provide a clear or legal release from liability, which is why they do not hold the same weight as a mutual agreement in writing. Similarly, paying off the mortgage would remove liability but does not create a release in the context of the transaction terms as initially agreed upon.