Loss Payable Clause

A loss payable clause is a provides insurance coverage to a lender (mortgagee) when property used as security for a loan is destroyed or damaged.

This type of insurance terms can provide protection for both real property and personal property.

For example, if a house that is mortgaged is condemned due to structural problems that was not present when the property was first used as collateral, and the borrower defaults on the home loan, then the bank would be able to claim for losses up to the outstanding balance on the mortgage. read more

Escalator Clause

An escalator clause is a provision is a loan agreement that gives a lender the permission to increase interest rates as much and as often as they deem fit.

While such a clause effectively allows a bank to charge as much as they want for their loans, banks have to consider various factors before taking any actions that might be deemed as an abuse of their rights.

This is because borrowers can easily switch and refinance their home loan with other lenders if they feel that they are being taken advantage of by their lenders. read more