What is another term for an alienation clause?

An alienation clause is commonly referred to as a due on sale clause. This particular clause is included in a mortgage agreement and gives the lender the right to demand full repayment of the loan if the borrower sells or transfers ownership of the property. The purpose of this clause is to protect the lender’s interest in the property by ensuring that the loan remains with the original borrower who qualified for it. When a property is sold, the lender may want to assess the creditworthiness of the new owner and ensure that they meet the lending criteria.

The term "due on sale" specifically addresses the situation when the property is sold; it triggers the requirement for the borrower to pay off the remaining loan balance. This is in contrast to the other options, which do not serve the same function within a loan agreement. For instance, a repatriation clause is not recognized in mortgage lending, a prepayment penalty clause relates to fees charged for paying off a loan early, and a collateralization clause pertains to the securing of a loan with specific assets. Thus, the most accurate and widely used term that aligns with the definition of an alienation clause is indeed the due on sale clause.