Course: A property is being sold in New Hampshire with an existing mortgage. Which clause in the mortgage would allow the lender to demand immediate repayment of the entire loan balance if the property is sold? (EN)

Number of Chapters: 1

Course Content

1 Chapter: A property is being sold in New Hampshire with an existing mortgage. Which clause in the mortgage would allow the lender to demand immediate repayment of the entire loan balance if the property is sold? (EN)

Chapter: A property is being sold in New Hampshire with an existing mortgage. Which clause in the mortgage would allow the lender to demand immediate repayment of the entire loan balance if the property is sold? (EN)
Introduction
The transfer of real property encumbered by an existing mortgage is a common transaction with significant implications for both the borrower (mortgagor) and the lender (mortgagee). Understanding the contractual obligations outlined within mortgage agreements is crucial for legal compliance and risk mitigation. A key clause dictating the transferability of mortgaged property is the alienation clause, also known as the due-on-sale clause. This clause directly addresses the lender's rights when the borrower attempts to sell or transfer ownership of the property.
The scientific importance of understanding the due-on-sale clause lies in its impact on financial markets and property law. It influences the pricing of mortgages, lender risk assessment, and the overall liquidity of the real estate market. From a legal perspective, the enforceability and interpretation of these clauses have been subject to litigation and legislative oversight, highlighting the need for a precise understanding of their function and limitations. The existence of this clause mitigates the lender's risk by ensuring that a change in property ownership does not compromise the loan's security. Without such a clause, lenders would face increased uncertainty regarding the creditworthiness and management capabilities of potential new owners, potentially increasing default rates and destabilizing mortgage-backed securities.
Educational Goals:
- Identify and define the due-on-sale clause (alienation clause) within a mortgage agreement.
- Explain the operational mechanics of the due-on-sale clause and its trigger event: the sale or transfer of the property.
- Analyze the legal basis and enforceability of due-on-sale clauses, particularly within the context of New Hampshire property law and relevant federal regulations.
- Evaluate the implications of a due-on-sale clause for all parties involved in a real estate transaction: the original borrower, the prospective buyer, and the lending institution.
- Distinguish the due-on-sale clause from other clauses related to property transfer, such as assumability clauses, and recognize circumstances that might trigger an exception to its enforcement.

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Course: A property is being sold in New Hampshire with an existing mortgage. Which clause in the mortgage would allow the lender to demand immediate repayment of the entire loan balance if the property is sold? (EN)

Course Content

1 Chapter: A property is being sold in New Hampshire with an existing mortgage. Which clause in the mortgage would allow the lender to demand immediate repayment of the entire loan balance if the property is sold? (EN)

Chapter: A property is being sold in New Hampshire with an existing mortgage. Which clause in the mortgage would allow the lender to demand immediate repayment of the entire loan balance if the property is sold? (EN)

Introduction