Say a seller has $80,000 left on an FHA loan. They just want someone else to to assume the mortgage payments and give $8,000 as a down payment. So, a total purchase price of $88,000.

They are transferring the title to the buyers name at closing for just the $8,000 down. They are not getting a release of liablility nor is the buyer getting approved to take over the assumption. The buyer would just pay the seller the mortgage amount each $.

What happens if the seller defaults or dies or something? Since the title is no longer in their name, but is in the buyer's name who does not have a promissory note attached to them, how would it work in terms of foreclosing? Moreover, if the seller got caught and had an acceleration clause acted upon, thus making them liable to pay the loan in full, how would it effect the buyer (who has the title in their name). Just curious as I have an investor buddy that just had the scenario posed to him by the sellers (it was due to a death in their family is the reason they are wanting to do this). What risk are their for the buyer in this situation?  It seems like it is all on the seller.  Thanks!