What is an alienation clause?

An alienation clause requires a borrower to pay the remainder of their mortgage loan balance off immediately during the sale or transfer of a property title and before a new buyer can take ownership. It goes into effect regardless of whether the transfer is voluntary or not. This clause is standard in most mortgage agreements today.

What is a mortgage alienation clause?

The clause provides assurances to the lender that the debt will be fully repaid in the event of a real estate sale or if the property is transferred to another party. The alienation clause essentially releases the borrower from their obligations to the lender since the proceeds from the home sale will pay off the mortgage balance.

What is alienation in real estate?

In real estate, alienation is the voluntary legal action taken by a property owner to transfer or dispose of their property. It encompasses a property’s right to be sold or given to someone else. Nearly all mortgages today include an alienation clause, which prevents the borrower from transferring the loan with the sale of the home.