Acceleration Clause

Acceleration Clause Context: You missed three months of payments.Without this clause: The bank would have to sue you every single month for that month's missing payment.With this clause: The lender can "accelerate" the maturity of the loan. They declare the entire balance (all $700k!) due immediately. This is the first step in the foreclosure process.Right to Reinstate (The "Second Chance")The Relief: Even after the bank hits the "Acceleration" button, the borrower usually has a window of time to fix it.How to fix it: The borrower pays all missed payments + late fees + legal costs to bring the loan current. If they do this, the loan returns to normal as if nothing happened.Due on Sale Clause (The Alienation Clause) If there is a Due on Sale Clause in your mortgage contract, you can’t assign your mortgage to a new buyer. The Scenario: You have a low 3% interest rate. You want to sell your house to a buyer, but current rates are 6%. The buyer says, "Can I just take over your loan payments?"The Rule: No. Upon the sale (alienation) of the property, the entire loan balance is due immediately. The old loan must be paid off, and the buyer must get their own new loan.