A due-on-sale clause in a South Dakota mortgage allows the lender to:
Correct Answer
B) Demand full payment of the loan if the property is sold or transferred
A due-on-sale (alienation) clause gives the lender the right to demand full repayment of the loan balance if the borrower sells or transfers the property. This prevents assumption of the loan without the lender's consent.
Why This Is the Correct Answer
A due-on-sale (alienation) clause gives the lender the right to demand full repayment of the loan balance if the borrower sells or transfers the property. This prevents assumption of the loan without the lender's consent.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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