Indiana Real Estate Broker Exam — All Questions
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1 questions
Financing
A mortgage clause that lets the lender demand full repayment of the loan balance if the borrower sells or transfers the property is a(n):
- a.Defeasance clause
- b.Alienation (due-on-sale) clause✓
- c.Prepayment clause
- d.Subordination clause
An alienation clause, also called a due-on-sale clause, allows the lender to call the entire balance due when the property is transferred, preventing an unqualified buyer from assuming the loan. A defeasance clause requires the lender to release the lien when the debt is paid in full.