Finance
In New Mexico, which of the following describes a 'due-on-encumbrance' clause in a mortgage?
AA clause requiring payment when the property is used as additional collateral
BA clause requiring full loan payoff if the borrower places a subordinate lien on the property without lender consent✓ Correct
CA clause requiring payment of all property taxes
DA clause prohibiting refinancing
Explanation
A due-on-encumbrance clause (rarer than due-on-sale) requires the borrower to pay off the loan if they place additional liens on the property without lender consent, protecting the lender's security position.
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