The idea of “acceleration” is used in foreclosure proceedings to establish a certain amount that is owed to the lender by the debtor.  This process allows the mortgage holder, whether it is a bank or another lien holder, to claim back the entirety of the debt that is owed and payable if the contractual agreement for payment has been broken.  Most mortgage contracts make room for acceleration clauses, which actually work to protect the investments of the mortgage holder or lien provider.  If the mortgage holder does not have this clause included in their mortgage contract, they have only two options for repayment: first option is to wait until the time has come when payments are due; second option is to compel a court to force a sell of some of the property to make up for the past due payments.  Additionally, the court has the right to order the property to be sold in conjunction with the agreement of the contract.  In this case, the profit from the sale would go directly to the lien holder or mortgage holder.

To give an example of acceleration of foreclosure, imagine a lien is given on a $5,000 property.  Monthly payment have been required but the debtor fails to make one or more of these payments.  The mortgage holder can demand payment of the entire $5,000.  Alternatively, they can accelerate the loan in order to regain full payment up to date.

It is important for you, whether you are a lien holder or the debtor, to understand the particular and specific laws regarding foreclosure for your state of residence or the state in which the loan was administered.  Acquainting yourself with and knowing these laws will aid you in your foreclosure procedures should it be required.  You can also find a bounty of information on your state’s official website.

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