Full access allows:
- Solve all tests online without limits;
- Remove all advertisements on website;
- Adding questions to favorite list;
- Save learning progress;
- Save results of practice exams;
- Watching all wrong answered questions.
34. Did the lender have the right to accelerate?
There is no applicable statute.
The lender accelerated the loan, and after the owner failed to pay the accelerated amount, the lender initiated a foreclosure action. At the time of the acceleration, the owner was current on all loan payments.
In order to protect itself from a potential loss, the lender had the insurance policy reinstated by paying the delinquent premium. The owner then promptly tendered the amount of the delinquent insurance premium payment to the lender, but the lender refused to accept it.
The owner made the loan payments when due but neglected to pay an insurance premium. When the lender learned that the owner was not maintaining the insurance, the lender notified the owner that the loan was in default and that it planned to accelerate the loan unless the lender received notification within 10 days that the premium had been paid. The owner failed to pay the premium within that time period, and the insurer notified both the owner and the lender that it was canceling the coverage.
An owner acquired an apartment building and financed part of the purchase with a mortgage loan. The promissory note contained a clause that permitted the lender to accelerate the outstanding loan balance if the owner defaulted on the terms of the loan unless the owner cured the default within 10 days of a notice of default. The mortgage required the owner to make loan payments, maintain casualty insurance, and pay property taxes.
Comments (0)
There are no comments at the moment. If you found an error or think question is incorrect, tell everyone about it
Only signed in users can write comments
Signin
A is incorrect. Once acceleration has properly occurred, the consequences cannot be avoided by the owner attempting to pay the delinquent insurance premium. Foreclosure can only be avoided by paying the mortgagee the entire accelerated amount.
B is incorrect. The failure to pay the insurance premium triggered the acceleration of the debt. The only way to avoid foreclosure would be to redeem the property by paying off the debt.
C is incorrect. The desire to bring a foreclosure action does not create a right to accelerate a mortgage. Rather, the right to accelerate depends upon whether a contractual term of a mortgage has been breached, such as the failure to pay an insurance premium.