Question

A clause in which the full mortgage amount becomes due and payable upon default is known as an acceleration clause.

True
False

Answer 1

An acceleration clause is a provision in a mortgage contract that allows the lender to demand immediate repayment of the full loan amount upon default.

Step-by-step explanation:

An acceleration clause is a legal provision in a mortgage contract that allows the lender to demand immediate repayment of the full loan amount if the borrower defaults on the loan. This clause effectively accelerates the payment schedule, making the entire mortgage due and payable. It is typically found in loan agreements to protect the lender's interests in case of default.