Question

Fast flip buys a house with a mortgage from first frog bank. first frog bank learns of the transaction. what allows first frog bank to call in the note?

A) Acceleration clause
B) Amortization schedule
C) Collateral agreement
D) Escrow account

Answer 1

The correct answer is A) Acceleration clause. An acceleration clause allows the lender to demand immediate repayment of the entire remaining balance of the loan if certain conditions are met, such as when the borrower sells the property without the lender's knowledge or consent.

Step-by-step explanation:

The correct answer is A) Acceleration clause.

An acceleration clause is a clause in a loan agreement that allows the lender to demand immediate repayment of the entire remaining balance of the loan if certain conditions are met. One common condition for invoking the acceleration clause is when the borrower sells the property without the lender's knowledge or consent. In this case, when Fast Flip buys a house with a mortgage from First Frog Bank and First Frog Bank learns of the transaction, it can call in the note by invoking the acceleration clause.