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Yes, it happens all the time. In fact most of the time when a house is sold the seller still has a mortgage.What happens is the transaction is handled by a title company that collects the money from the buyer. The title company uses the purchase money from the buyer to pay off the remaining balance on the seller's mortgage. This removes the lien that the mortgage company has on the property so that ownership can be transferred.The seller will get a check after the transaction is complete for whatever amount is left over.
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For Sale: $124,900
For Sale: $185,900
For Sale: $205,000