Mortgage Clauses That Get Tested

ACCELERATION: on default, the lender may declare the entire balance due — the clause that makes foreclosure possible. DUE-ON-SALE (alienation): the loan must be paid off when the property transfers, blocking assumptions. PREPAYMENT clauses may charge a penalty for early payoff (banned on most consumer loans today). DEFEASANCE/RELEASE: when paid in full, the lien is released — the borrower should see a satisfaction of mortgage or deed of reconveyance recorded. SUBORDINATION: an existing lender agrees to drop behind a new loan — common when construction financing follows a land loan.