Question

A provision that gives the lender the right to demand full repayment of the mortgage if the owner sells the property or transfers title to it. Also called an alienation clause or due on sale clause.

A. Alienation clause
B. Prepayment penalty
C. Balloon payment
D. Due diligence

Answer 1

The correct answer is A. Alienation clause. An alienation clause, also known as a due on sale clause, is a provision in a mortgage agreement that gives the lender the right to demand full repayment of the mortgage if the owner sells the property or transfers title to it.

Step-by-step explanation:

The correct answer is A. Alienation clause.

An alienation clause, also known as a due on sale clause, is a provision in a mortgage agreement that gives the lender the right to demand full repayment of the mortgage if the owner sells the property or transfers title to it. This clause protects the lender's interest in the property by allowing them to collect the outstanding balance of the loan if ownership changes. For example, if the owner of a property with a mortgage decides to sell the property, the lender can invoke the alienation clause and require the full repayment of the outstanding mortgage balance.