Finance
A Mississippi homeowner has a mortgage with a 'due-on-sale' clause. If the homeowner transfers title to a buyer who 'assumes' the mortgage without lender approval, the lender may:
ADo nothing since the mortgage transfers automatically with the property
BCall the entire loan balance due and payable immediately upon transfer✓ Correct
COnly increase the interest rate
DRequire the original borrower to remain on the loan for 2 years
Explanation
A due-on-sale (alienation) clause allows the lender to accelerate the entire loan balance if the property is transferred without lender approval. This protects the lender from having an unqualified borrower take over the loan and prevents buyers from assuming below-market rate loans without permission.
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