Business Definition for: alienation clause
alienation clause
type of acceleration clause allowing the lender to demand full payment when mortgaged property is conveyed to another owner. An example is a
due-on-sale clause
in a mortgage deed.
See also
assumable mortgage
Related Terms:
mortgage giving the borrower the right to assign the unpaid balance of his obligation, without prepayment penalty, to another person upon sale of the mortgaged property. The buyer assumes payment of the loan at the same rate and terms for the remainder of the mortgage, and the seller remains secondarily liable for the obligation. Department of Veterans Affairs mortgages and mortgages insured by the Federal Housing Administration are generally assumable by the buyer. Contrast with portable mortgage.
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