An owner of a property enters into a purchase money mortgage with a buyer whereby the buyer will make payments to the seller and the seller will continue making payments to the mortgagee. Which clause does the lender enforce when sending a notice to the seller that the loan is due and payable?

Question

Yazmin Barrett

Business

27 August, 03:02

An owner of a property enters into a purchase money mortgage with a buyer whereby the buyer will make payments to the seller and the seller will continue making payments to the mortgagee. Which clause does the lender enforce when sending a notice to the seller that the loan is due and payable?

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Answers (1)

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Stanley Banks · Answer 1

Alienable clause

Explanation:

Alienable clause is made to prevent the borrowers to transfer their responsibility to another person without the lender's permission.

Basically, as soon as the property is sold, the borrowers will be legally required to pay their loan to the lenders. By enforcing this, the lender will obtain financial protection and reduce their risk. Currently, almost all mortgages that available in the market will require this clause within the contract.