An exculpatory clause is a provision in a mortgage allowing the borrower to surrender the property to the lender without personal liability for the loan. This means the borrower can walk away from the property if unable to meet the mortgage obligations, without other personal assets being pursued for the debt.
A policy of restraint in taking legal action to remedy a default or breach of contract, generally in the hope that the default will be cured, given additional time.
MGIC is a provider of private mortgage insurance in the United States. Private mortgage insurance (PMI) protects lenders by covering mortgage payments in the event the borrower defaults, particularly when the borrower puts down less than 20% as a down payment.
A rate cap refers to predetermined limits placed on adjustments to the interest rate on an adjustable-rate mortgage (ARM), safeguarding borrowers from excessive rate fluctuations over the life of the loan.
