Mortgage on a wholesale deal

[Victor Barboza]

Hi, I have little confusion on how the mortgage is taken care of on a wholesale deal at closing. For example:

Suppose the ARV of the property is $150,000, and they owe $40,000, and you make an offer for $65,000. Would the outstanding mortgage be paid off at closing and the seller be left with the difference of $25,000?

Or suppose your offer is exactly what is owed, at closing would you ultimately just be paying off what they owe?