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Intermediate45 minutes8 terms

Loan Acceleration Clause: Investor Terms

This collection offers a curated selection of key terms related to loan acceleration clauses, designed to help investors understand these critical mortgage provisions. It provides clear definitions for concepts you may encounter when reviewing loan documents or managing distressed assets. Use it as a quick reference to navigate the terminology surrounding loan default and lender actions.

Term Collection

1

Cure Period

A cure period is a specified timeframe granted to a borrower in default to remedy a breach of a loan agreement, typically before the lender can initiate more severe actions like foreclosure or invoke an acceleration clause.

Intermediate2 min
2

Due-on-Sale Clause

A due-on-sale clause is a mortgage provision allowing the lender to demand immediate repayment of the entire loan balance if the property is sold or transferred without their consent, protecting against unauthorized loan assumptions.

Intermediate13-14 min
3

Loan Covenants

Loan covenants are legally binding conditions within a loan agreement that borrowers must adhere to, designed to protect the lender's interests by ensuring financial health and responsible asset management throughout the loan term.

Intermediate13 min
4

Foreclosure

Foreclosure is the legal process by which a lender takes possession of a property when the borrower fails to make mortgage payments, leading to the sale of the property to recover the outstanding debt.

Beginner12-15 min
5

Security Instrument

A security instrument is a legal document that pledges a borrower's property as collateral for a loan, giving the lender the right to seize the property if the borrower defaults on the debt.

Intermediate5-6 min
6

Loan Default

Loan default is the failure of a borrower to fulfill the terms of a loan agreement, typically by missing required payments, which can lead to severe financial consequences like foreclosure and credit score damage.

Beginner15-18 min
7

Promissory Note

A promissory note is a legally binding written promise by one party to pay a specific sum of money to another party on a specified date or on demand, outlining all loan terms.

Beginner15-18 min
8

Mortgage

A mortgage is a loan obtained from a lender to purchase real estate, where the property itself serves as collateral for the debt. Borrowers make regular payments, including principal and interest, over a set period until the loan is fully repaid.

Beginner15-18 min

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