What term describes a clause that can lead to foreclosure due to the sale of the property?

The term that describes a clause that can lead to foreclosure due to the sale of the property is the power of sale clause. This clause gives the lender the right to initiate a foreclosure process if the borrower defaults on the mortgage or if certain conditions related to the property sale are met. Essentially, it allows the lender to sell the property without going through the lengthy court process typically associated with foreclosure, streamlining the remedy for the lender in the event of default.

The power of sale clause is advantageous for lenders because it provides a clear, pre-defined mechanism to reclaim the property if repayment terms are not met. This is especially relevant in situations where the borrower might decide to sell the property, as it addresses the lender's ability to act swiftly to protect their financial interests.

Other types of clauses mentioned do not specifically relate to the situation of foreclosure arising from the sale of the property. For instance, an acceleration clause typically allows the lender to demand the entire loan balance upon a borrower defaulting, while a default clause outlines the conditions under which a borrower may be considered in default but does not directly enable foreclosure actions due to the property sale. A prepayment clause generally allows the borrower to pay off the loan early, often with specific terms, but does not directly deal