Category Archives: Uncategorized

Dragnet Clause

A dragnet clause written into a loan contract empowers a lender to a specific link debt of a borrower with other debts.

Such terms can give lenders too much of an unfair advantages regarding collections. As such, dragnets are often frowned upon by consumers and even government authorities.

The dynamics of how it works is something like this. read more

Dry Mortgage

A dry mortgage is a home loan whereby the lender’s only avenue of getting back the outstanding balance should the borrower default, is via the foreclosure of the property.

Also known as a nonrecourse mortgage, this means that the lender will not have to legal right to sue the borrower for a deficiency judgment to recover any amount of unsettled debt.

This can happen when the home foreclosed is valued less than the loan balance due plus the costs of foreclosure. read more

Waiver Of Escrows

When there is a waiver of escrows, it basically means that a lender has agreed to allow a borrower to pay for insurance and taxes directly without needing to open an escrow account with them.

When an escrow account is a requirement deemed necessary by a lender, it is not often that they would allow a waiver of escrows.

This is because the very purpose of such accounts are meant minimize the risks of borrower not paying for those expenses which could jeopardize the lender’s position on the loan. read more