Are acceleration clauses legal in real estate?

Acceleration clauses are very common in repayment contracts. However, it’s important to check with the attorney who handled your closing to make sure this clause is abiding by your state’s laws. The laws regarding acceleration clauses can vary depending on the state the borrower lives in.

How can I avoid an acceleration clause?

Borrowers do have options when it comes to avoiding an acceleration clause. Work with your lender to figure out a loan modification or repayment plan to make the delinquent payments. Keep in mind that the borrower will be responsible for paying for the costs the lender incurred while working on the mortgage acceleration.

When do lenders send out mortgage acceleration letters?

While each lender has their own timeline for this type of mortgage acceleration, most wait 90 days after the first missed payment to send out the letter. Lenders will also usually give the borrowers a 30 day notice to repay the loan or come up with a financial plan.

What Is A Mortgage Acceleration Clause?