A growing equity mortgage (GEM) is a full term home loan with an interest rate usually comparable to prevailing rates, in which payments increase yearly with the additional payments going towards principal reduction.

The interest rate can sometimes be fully indexed, which means that indices would influence the amount of interest charged. It can also be a fixed rate mortgage.

The result of such loan structures is that a borrower would be able to fully repay the mortgage in a shorter period compared to the normal amortization schedule. read more

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

A release clause is a provision in a development loan contract that allows the borrower to release part of the developed lots from being held as as security by the lender.

This means that at the point of loan closing, the development might be fully collateralized by the loan.

And that the amount and value of secured assets fall over time, potentially reaching it’s minimum towards the end of the construction works. read more

Detrimental reliance refers to a court order for a party to fulfill their obligations in a contract as failing to do so would have a huge negative effect on the affected party who took action based supposedly factual information.

Nonperformance can lead to the victim facing a catastrophic financial predicament.

While these method of recourse is a deterrent against rouge business operators, it can also be a focal point when mistakes are made. read more