Definition of Due on Provision Clause:

Due on Provision Clause/Sale in Orange County, California:

A provision in a mortgage contract that requires the mortgage to be repaid in full upon a sale or conveyance of partial or full interest in the property that secures the mortgage. Mortgages with a due-on-sale clause in Orange County, California as is the case in the rest of the United States ARE NOT assumable. This clause helps protect lenders against below-market interest rates. A due-on-sale clause is written into the mortgage contract to protect the lender from the borrower transferring the property to another owner when the rate of the mortgage is below the prevailing interest rates at the time of the transfer.


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