Final answer:
The provision in a loan agreement that entitles the lender to take possession of a property and collect any income from it if the buyer defaults is called foreclosure.
Step-by-step explanation:
The provision in a loan agreement that entitles the lender to take possession of a property and collect any income from it if the buyer defaults is called foreclosure.
Foreclosure is a legal process through which the lender exercises their right to claim the property used as collateral in a loan agreement, in order to recover the unpaid loan amount. Once the property is seized, the lender can sell it to recover the outstanding debt.
For example, let's say a person takes out a mortgage loan to purchase a house. If they fail to make the mortgage payments as agreed, the lender has the right to initiate foreclosure proceedings and eventually take possession of the property.