Acceleration is a clause that is usually found in Sections 16, 17, or 18 of a typical mortgage in the US. Not all accelerations are the same for each mortgage, as it depends on the terms and conditions between lender and obligated mortgagor(s). When a term in the mortgage has been broken, the acceleration clause goes into effect. It can declare the entire payable debt to the lender if the borrower(s) were to transfer the title at a future date to a purchaser. The clause in the mortgage also instructs that a notice of acceleration must be served to the obligated mortgagor(s) who signed the Note. Each mortgage gives a time period for the debtor(s) to cure their loan. The most common time periods allot to debtor(s) is usually 30 days, but for commercial property it can be 10 days. The notice of acceleration is called a Demand and/or Breach Letter. In the letter it informs the Borrower(s) that they have 10 or 30 days from the date on the letter to reinstate their loan. Demand/Breach letters are sent out by Certified and Regular mail to all notable addresses of the Borrower(s). Also in the acceleration of the mortgage the lender must provide a payoff quote that is estimated 30 days from the date of the letter. This letter is called an FDCPA (Fair Debt Collections Practices Acts) letter and/or Initial Communication Letter. Once the Borrower(s) receives the two letters providing a time period to reinstate or pay off their loan the lender must wait until that time expires in to take further action. When the 10 or 30 days have passed that means that the acceleration has expired and the Lender can move forward with foreclosing on the property.
The mortgage holder can usually initiate foreclosure at a time specified in the mortgage documents, typically some period of time after a default condition occurs. In the United States, Canada and many other countries, several types of foreclosure exist. In the US for example, two of them – namely, by judicial sale and by power of sale – are widely used, but other modes are possible in a few other U.S. states.
Think about it, what if you were able to pick an area that you would like to live in but may not be able to afford right now or just no ready to make that big purchase. With the Rent to Own process, you can get into that house without the 30 year commitment. You can even have a portion of the rent credited to the sales price or closing costs, that’s instance equity at closing for you.