Acceleration Clause

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This is a provision in a loan, typically in a mortgage, that allows the lender to demand immediate payment of the entire loan in the event that certain specified events occur or the terms of the loan are breached. These could include bankruptcy of the borrower, failure to pay property taxes, or failure to make the loan repayments. To comply with the acceleration clause, the borrower may have to sell the property, and in addition may be obligated to reimburse the lender for various costs and fees the lender incurs in pursuing any remedies to recover the money it lent. These remedies could include the lender foreclosing on the mortgage.