Posted by Danielle on August 13, 2003 at 10:58:45:
I’ve searched the archives for the answer to this, but can’t find the answer where the prepayment applies to a loan in default. I found where a prepayment penalty will not be allowed if the lender calls the loan due to the"due on sale clause", however, I think the situation will be different in a foreclosure situation since it is the act of the borrow (non-payment of the debt) that has brought the lender to initiate the foreclosure. Is this correct? Will my only alternative be to request that the lender eliminate the due on sale clause during a short sale negotiation?