Can someone help explain this? In the answer explanation, there are two sentences that directly contradict the answer. I will put those in all caps.
Wilk bought an apartment building from Dix Corp. There was a mortgage on the building securing Dix's promissory note to Xeon Finance Co. Wilk took title subject to Xeon's mortgage. Wilk did not make the payments on the note due Xeon, and the building was sold at a foreclosure sale. If the proceeds of the foreclosure sale are less than the balance due on the note, which of the following statements is correct regarding the deficiency?
A. Xeon must attempt to collect the deficiency from Wilk before suing Dix.
B. Dix will not be liable for any of the deficiency because Wilk assumed the note and mortgage.
C. Xeon may collect the deficiency from either Dix or Wilk.
D. Dix will be liable for the entire deficiency.
If the proceeds of the foreclosure sale are less than the balance due on the note, Dix will be liable for the entire deficiency. This question tests your understanding of the liabilities involved in assuming a mortgage obligation.
The mortgage was taken out by Dix Corp. from Xeon Finance Co. When Wilk took title subject to Xeon's mortgage, Dix WAS NOT RELIEVED of its financial obligation under the original mortgage. The only way for Dix to be released from its financial obligation to Xeon Finance is to have the finance company release it from its obligation. When new buyers assume a mortgage, they agree to make payments on that mortgage, but that agreement DOES NOT MEAN that the mortgage company has released the original debtor from the obligation.
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