Due-on clause exceptions and waivers
This article covers exceptions and waivers to the enforceability of the due-on clause present in all trust deeds and enforced on sales only during a cycle of rising long-term fixed rate mortgage rates.
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Tag: due-on clause
A closer look at the due-on clause
This article covers an owner’s use of property rights which allows a mortgage holder to capitalize on the due-on clause to extract further profit by calling the mortgage due and payable, or waiving the call to modify the interest rate and payment schedule at current market rates.
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(Re)introducing the due-on clause
This multimedia article explains when due-on clauses become used in the economic cycle and under which sale and leasing arrangements.
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Form-of-the-Week: Deed of Trust & Assignment of Rents, and All-Inclusive Trust Deed Addendums — Forms 450, 442 and 443
An agent or escrow officer uses these forms when a seller of property carries back an all-inclusive note and trust deed (AITD) evidencing a principal debt which includes the balance owed on an existing mortgage and a payoff demand.
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Waiver by Negotiation or by Conduct
Covers: Negotiating a limitation or waiver of the existing mortgage holder’s due-on rights; Valuable consideration paid in exchange for a mortgage holder’s waiver; A mortgage holder’s waiver of their right to enforce the due-on clause by their conduct.
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Due-on-Death, Divorce, and Inter-Family Transfer Exceptions
Covers: Avoiding due-on enforcement on the death of an owner of a one-to-four unit residential property encumbered by an owner-occupant consumer-purpose mortgage; Due-on divorce and inter-family transfer exceptions
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Due-on-Further Encumbrance and Foreclosure
Covers: Triggering the due-on clause on a further encumbrance of a property, and a senior mortgage holder’s call of the mortgage on completion of a foreclosure sale by a junior lienholder.
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Due-on-Lease Trust Deed Provision
Covers: Triggering the due-on clause in a trust deed on entry into a lease with a term over three years, or a lease for any term coupled with an option to buy.
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Triggered by Any Transfer of Any Legal or Equitable Ownership Interest in the Security
Covers: The sale of a property as the primary event triggering the mortgage holder’s exercise of the due-on clause; Triggered by any method for transfer of any legal or equitable ownership in the real estate interest encumbered by a trust deed.
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Mortgage Holder Interference in Transactions when Interest Rates Rise
Covers: The due-on clause as the single greatest burden on the use and mobility of commercially available title for ownership of property rights; Prevalence of the due-on clause in periods of economic recession and recovery; Rising rates bring lender interference.
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