Scary language in loan document
Question: One late payment can mean many things to a homeowner, but what’s important >is what it means to a bank. My bank considers a mortgage in default if the >payment is more than ninety days late.
Answer: That’s not the part that bothers me, especially since I’m set up for direct deduction from my checking account. It was the language about “I will be in default if … Lender reasonably determines that I am or will become unwilling or unable to repay my obligations under the Loan …”
This makes it sound like the loan can be called even if I never missed a single payment, just by doing something that made the bank nervous. Suppose I lose my job, or marry a man with a bad credit record, or ???
I imagine that my real protection is that the bank isn’t going to be eager to declare the loan in default, since it will mean a huge hassle and probably lots of expenses for them. But I’d be happier with legal protections instead of just practical…
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