Deed/Title Change and Loan Acceleration
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Deed/Title Change and Loan Acceleration
If a property is sold ‘subject to existing liens’ and the deed is changed to
buyers name, is the existing mortgage accelerated?
Asked on May 29, 2017 under Real Estate Law, Maryland
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
The full balance of a mortgage loan may be accelerated and called due (i.e. requiring repayment in full) upon sale or other conveyance of the property that is used to secure the promissory note. This is known as the "due on sale clause". The lender has the right, but not the obligation, to call the note due under this circumstance. In the U.S. virtually all mortgage loans contain these clauses (as oppossed to assumable mortgages which allow transfer of ownership without such acceleration).
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