A due-on-sale clause helps to protect the lender, or the ultimate holder of the mortgage, from the risk that the mortgage may be transferred to the new owner of a property when the rate on the mortgage is below current market interest rates. This would extend the life of the mortgage; the holders of a below-market-interest-rate mortgage - or a mortgage-backed security, asset-backed security, or collateralized debt obligation backed by a below-market-interest-rate mortgage - generally favor the early retirement of that mortgage.
Investment dictionary. Academic. 2012.
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due-on-sale clause — A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage upon sale or transfer of ownership of the property used to secure the mortgage. (See: acceleration clause) Category:… … Law dictionary
Due-on-sale clause — A due on sale clause is a clause in a loan or promissory note that stipulates that the full balance may be called due upon sale or transfer of ownership of the property used to secure the note. The lender has the right, but not the obligation, to … Wikipedia
due-on-sale clause — A provision usually found in a note or mortgage whereby the entire debt becomes immediately due and payable at mortgagee s option upon sale of mortgaged property. Such clauses are generally used to prevent subsequent purchasers from assuming… … Black's law dictionary
due-on-sale clause — A provision in a mortgage permitting the lender to demand payment in full when the property is sold. American Banker Glossary A mortgage contract clause stipulating that the borrower pay off the full remaining principal on a mortgage if the… … Financial and business terms
due-on-sale clause — Fin a provision requiring a homeowner to pay off a mortgage upon sale of the property … The ultimate business dictionary
due-on-sale provision — USA A provision in a promissory note, loan or mortgage that allows the lender to demand payment of the full balance owed when the borrower sells or transfers real property used as security. This kind of clause is standard in mortgages executed in … Law dictionary
acceleration clause — n: a clause (as in a loan agreement) that accelerates the date of payment in full under specified circumstances (as default by the debtor) Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. acceleration clause … Law dictionary
Assumption Clause — A provision in a mortgage contract that allows the seller of a home to pass responsibility to the buyer of the home for the existing mortgage. In other words, the new homeowner assumes the existing mortgage. There are typically many conditions… … Investment dictionary
United Nations Convention on Contracts for the International Sale of Goods — The United Nations Convention on Contracts for the International Sale of Goods (abbrev. CISG) [United Nations Convention on Contracts for the International Sale of Goods, Vienna, 11 April 1980, S.Treaty Document Number 98 9 (1984), UN Document… … Wikipedia
Contract Clause — United States of America This article is part of the series: United States Constitution Original text of the Constitution Preamble Articles of the Constitution I · … Wikipedia