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Due-on-Transfer Risk in an Era When Rates Cannot Decline

Loan Due On Transfer

The current conventional wisdom is that so long a lender is receiving payments, the lender will not call a loan in default just because the borrower conveyed title, without paying off the debt, in violation of “due-on-transfer” clauses in the mortgage.  That conventional wisdom is based, however, on experiences born out of our 35 year history of declining interest rates.  If rates were to ever increase, to say 4.5% (a 50% increase from current rates), might holders of debt become more proactive in hunting for low yielding 3% mortgages to call due?    Learn more by watching this webcast.

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