Alienation Clause
What Does Alienation Clause Mean?
A clause in a mortgage contract that requires full payment of the balance of a mortgage at the lender's discretion if the property is sold or the title to the property changes to another person. Nearly all mortgages have an alienation clause.
Investopedia explains Alienation Clause
An alienation clause protects a lender by preventing a borrower from assigning debt without the lender's approval. An alienation clause protects the lender from credit risk of the original borrower, or third-party credit risk if the original borrower assigns the debt to another party.