What is an accelerations clause?

An acceleration clause is a provision in a mortgage agreement or other loan document that gives the lender the right to demand that the full balance of the loan be paid immediately if a borrower defaults on a monthly payment. This clause is also known as a “due on sale” clause because it allows the lender to demand the full amount due if the property is sold. In Wisconsin, lenders must provide a written notice to the borrower at least 30 days before exercising the accelerations clause. The notice must include an explanation of the borrower’s right to cure the default and a statement that the loan amount will become due and payable if the breach is not cured. It must also include a statement giving the exact amount that must be paid to cure the default. Borrowers in Wisconsin can dispute the lender’s notice if they believe it to be incorrect or if they don’t receive it in the time frame required by law. If a dispute is raised, the lender must provie further explanation about the notice of default and give borrowers additional time to cure the default.

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What is an accelerations clause?

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