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Know What Your Mortgage Says Regarding Eminent Domain Ahead of Time

Published On: October 14th, 2012 | Author: Perry Law, P.C. | Category: Real Estate and Title

It may come as a surprise, but most mortgages contain a clause regarding the event of eminent domain (a process where the government takes private property to serve a public purpose in exchange for just compensation). Most eminent domain provisions contain two important points. First, the mortgagor has a responsibility to notify the lender upon notice of an eminent domain proceeding. Second, the mortgagor assigns a portion or all of the eminent domain proceeds. Failure to comply with these requirements may result in a default under the mortgage. Therefore, its important to know what your mortgage states ahead of time before its too late.