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An Assumption Agreement refers an undertaking of a debt or obligation primarily resting upon another person. It is a legal contract that effectuates an agreement between two parties, whereby one party agrees to assume the responsibilities, interests, rights, and obligations of another party in respect to a separate agreement made between the latter and a third party. Parties to an assumption agreement are known as assignee and assignor.
When mortgaged property is conveyed to another person, through an assumption agreement the new owner assumes the mortgage and the mortgage holder agrees to the assumption.