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Acceleration, as the term implies, is asking for prompt payment as opposed to what was required by the mortgage agreement originally. In a loan agreement, if an acceleration clause is present, then we should highlight that the borrower will pay off the loan promptly provided that particular conditions are satisfied.
In situations where the borrower has been unable to make his payments and the lender forecloses, then the lender may opt for the option of ‘accelerating’. This renders the whole amount payable. The second situation which may qualify for the notion to operate is where the lender has been misinformed on purpose and the residence in question is not permanent. It could be that it is rented property now. Acceleration can be employed in such a set of facts.
Related Topics: What is an Escrow Account 4.12- What is "Early payment default"? What steps are required during the foreclosure process?
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