47. What clause in a mortgage allows the lender to demand immediate payment of the entire loan balance if the borrower transfers the property without permission?
Answer: A
Alienation Clause
The alienation clause in a mortgage permits the lender to require immediate payment of the entire loan balance if the borrower transfers the property without the lender's consent. This clause is designed to protect the lender's interests by preventing unauthorized transfers of property.
A) alienation
This option is correct as the alienation clause specifically addresses the lender's right to demand full repayment if the borrower transfers the property without permission. The clause ensures that the lender can maintain control over who holds the mortgage and the terms under which the loan is repaid.
B) acceleration
Acceleration is not the correct option because it refers to the lender's right to declare the entire loan balance due upon certain events of default, rather than specifically addressing property transfers. While related to the enforcement of loan terms, it does not pertain to transfer permissions.
C) subrogation
Subrogation does not apply in this context, as it involves the substitution of one party in place of another in relation to a debt or claim. It does not concern the lender’s rights regarding property transfers or the immediate demand for payment.
D) subordination
Subordination is incorrect as it refers to the priority of claims in relation to a mortgage. It does not grant the lender the right to demand payment upon property transfer, but rather deals with the order of claims against a property in the event of default or foreclosure.
Conclusion
The alienation clause is essential for protecting lenders against unauthorized transfers of property, allowing them to call the loan due in such instances. In contrast, the other options do not address the specific issue of property transfer permissions and thus fail to meet the criteria of the question.