What is a dragnet clause?

What is a dragnet clause?

As used in some loan agreements (or security agreements), dragnet clauses give the lender greater credit support from the borrower. These clauses provide that collateral given to secure one loan from a lender to a borrower also secures other obligations of the borrower to the same lender.

Is dragnet clause valid?

A “blanket mortgage clause”, also known as a “dragnet clause” is one which is specifically phrased to subsume all debts of past or future origins. Indeed, it has been settled in a long line of decisions that mortgages given to secure future advancements are valid and legal contracts (Mojica vs. CA, G.R.

What is an acceleration clause in a mortgage?

An accelerated clause is a term in a loan agreement that requires the borrower to pay off the loan immediately under certain conditions.

What is a cross collateralization clause?

A cross-collateralization clause generally provides that the same collateral, often real property, secures multiple loans from the same lender. In contrast, a cross-default clause provides that an event of default under one loan constitutes as an event of default under a separate loan.

Can the mortgagor sell the mortgaged property?

That the MORTGAGORS shall not sell, dispose of, mortgage, nor in any other manner encumber the real property/properties subject of this mortgage without the prior consent of the MORTGAGEE (Deed and Amendment of Real Estate Mortgage).

What is a future advance clause?

A future advance is a clause in a mortgage that provides for additional availability of funds under the loan contract.

Do all mortgages have acceleration clauses?

Acceleration clauses most often appear in commercial mortgages and residential mortgages. They also appear in some leases. However, an accelerated clause may also specify that the borrower may pay off the loan in full prior to the loan’s maturity date.

Can the bank call in the mortgage?

Yes, under specific circumstances a lender can demand repayment even if your loan service is current. On term and intermediate loans, as well as mortgages, there is usually language in the note that allows a lender to call the note if the lender deems himself insecure.

Can you sell a cross collateralization mortgage?

Can you sell a cross-collateralized mortgage? If you have a home or other property that also serves as collateral for another property or loan, you will need to satisfy the lien against it before selling.

Why is cross collateralization bad?

Another major downfall of cross collateralisation occurs if you want to sell one, or more, of your properties. This is because you are essentially changing the terms of your contract with your lender. By selling one property you are taking it away from your lender as security and changing your loan-to-value ratio.

Can a mortgaged property be sold Philippines?

The sale or transfer of the mortgaged property cannot affect or release the mortgage. A transferee is necessarily bound to acknowledge and respect the mortgage. In fact, the mortgage on the property may still be foreclosed despite the transfer: Art.