All Forum Posts by: Mitchell Heddings

@Cody L., I was mainly just curious about the aspect of the clause. I'm one of those people that likes to read all of the fine print when I'm signing something... and brought up the clause to the closing attorney.

She told me... "I'm not quite sure that's legal... and she'd have to get back to me". But she hasn't followed up. 

Before today... I didn't even know the term for it. Special Shout Out to @Jeff S.

Like I said... no plans to take out another loan. We have enough Cash to take care of everything. But I'm one of those that likes to ask questions and know what is going on. 

I did a Google search and there's commentary about the "Garn. St Germain Law" which supposedly makes the clause "legal"... but not "enforceable", if the borrower pushes. 

I'm certainly not going to be the guinea pig that tries it. Intresting none the less though :)

The property is a Residential -Investment loan that is definitely not owner occupied. Like I said, I've never seen a clause like this before...  and it peaked my curiousity. I guess if I was a lender, I'd use something like it too. 

Thank you both for responding :) 

Hi, Guys. I have a question for any attorneys & mortgage gurus out there, that might be able to help :) 

Recently... I obtained financing for a project and noticed an interesting clause at closing. Basically, it says - 

"Borrower understands the lender is the owner of the senior mortgage and obligations secured thereof"... and then... " if any interest in the property is subject to a junior mortgage without lenders express consent"... "lender reserves the right to require immediate payment in full of all sums due". 

It then spills another paragraph about acceleration and their option to execute if desired if another mortgage is attached to the property after closing. 

My question.... is this even legally allowed, or enforceable? I've been doing this for a while, and I've never seen a provision like this. I wasn't planning to even take out an additional loan but was quite surprised when I noticed the wording. It's different and peaked my interest. 

Also - I'm in the State of NY if that helps.