FinancingMortgage_instrumentsMEDIUM
Kevin Lowe buys a home subject to a recorded security instrument that says the lender may declare the entire balance immediately due if Kevin transfers the property without consent. Which clause is being described?
Correct Answer
C) A due-on-sale clause addressing unauthorized transfer
A due-on-sale clause allows the lender to call the loan due if the property is transferred without the lender's consent. It is aimed at unauthorized transfer, not at ordinary monthly payment default.
Answer Options
A
A defeasance clause releasing the lien after paymentB
An acceleration clause dealing with payment defaultC
A due-on-sale clause addressing unauthorized transferD
A habendum clause defining the estate grantedWhy This Is the Correct Answer
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Real World Application in Financing
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Related Topics & Key Terms
Key Terms:
due_on_salealienation_clausesecurity_instrumenttransfer_restrictions
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