Can a bank recall your mortgage
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When it comes to home loans, many people are under the impression that banks don’t call you. After all, they are just lending you money. But there are a lot of things that can happen with a mortgage. For example, the bank may recall your mortgage.
But what does that mean? And what exactly can cause a bank to call you? This article will attempt to answer these questions, and more. Let’s find out.
What happens if a bank recalls your mortgage
If a bank recalls your mortgage, it means they have the right to call in a revolving loan and demand that the full amount of the loan be repaid immediately. This is legal if the bank clearly states in the loan agreement that they will call you to ask you to repay the money if you do not meet the terms of the loan.
For example, one or more late payments could cause the bank to call to demand that you repay the entire loan. If you pay your payments on time, your loan will probably not be repaid. Yet the bank decides what happens if you fail to make your monthly payments on time.
Reasons why a bank calls your mortgage
A bank can call on your mortgage for many reasons. These include in particular the following:
You haven’t paid your taxes
You may be called into your mortgage if you haven’t paid your taxes. Banks are often reluctant to keep a loan on their books if they think you won’t be able to repay it. Check your mortgage notes and whether they contain provisions that allow the lender to accelerate the mortgage when there are overdue taxes.
If your local taxing authority files a lien on your property, the mortgage lender can accelerate the loan. These tax liens are publicly available, so if the mortgage lender (like a bank) finds out about them, it’s easy to get your mortgage “called”.
you sold the house
If you sold your home, the bank may want to call your mortgage back, as it is no longer on the books. In this case, you will have to repay the loan. If you have a short sale, it is not a good idea to sell your home if you are in default on your mortgage, as this will force the bank to accelerate the loan.
By selling a house, the buyer pays you and you have the money to pay the mortgage. In this case, it is not necessary to redeem the mortgage.
You are in arrears
The bank can recall your mortgage if you are late on payment. In this case, the bank will try to recover the outstanding amount from you, even if you are a few days late in your payments.
This is especially likely if the bank wants to do a foreclosure. If your default is not very serious, the lender can try to find a compromise with you so that the debt is repaid.
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