Alienation Clause

An alienation clause is a mortgage provision that requires the borrower to pay the balance of the loan after the sale or transfer of the property. Almost every mortgage loan given today has this clause inside it. The alienation clause prevents the borrower from assigning the mortgage debt to someone else without the lender's approval. It also ensures that the property, which acts as collateral on the loan, is always under the borrower's name while the mortgage remains active. The use of an alienation clause is so common that assumable mortgages are very rare in today's real estate market. In fact, a borrower needs to specifically ask the lender for an assumable mortgage at the time they take the loan. Even then, it is unlikely that the mortgage lender will agree to this type of loan.