Acceleration Clause
A
loan provision giving the lender
the power to declare all sums owing lender immediately due and payable
upon the violation of a specific loan
provision, such as the sale of the property, or the failure to make loan
payments
on time.
Example: Sam sells his property to Mary who takes over Sam's mortgage
payments. They do not notify the lender of this transaction. The lender
finds out that the title to the property has transferred and calls the
loan, since the loan documents state that the loan is due on the sale
of the property. Sam is now liable to pay his lender in full.
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