— Also termed mortgagee clause. See LOSS-PAYABLE CLAUSE; ATIMA. [Cases: Mortgages 201. C.J.S. Mortgages §§ 311–314.]
open mortgage clause. A mortgage clause that does not protect the mortgagee if the insured mortgagor does something to invalidate the policy (such as committing fraud). • This type of clause has been largely superseded by the mortgage-loss clause, which affords the mortgagee more protection.
— Also termed simple mortgage clause. Cf. MORTGAGE-LOSS CLAUSE.
standard mortgage clause. A mortgage clause that protects the mortgagee’s interest even if the insured mortgagor does something to invalidate the policy. • In effect, this clause creates a separate contract between the insurer and the mortgagee.
— Also termed union mortgage clause.
MORTGAGE COMMITMENT
mortgage commitment. A lender’s written agreement with a borrower stating the terms on which it will lend money for the purchase of specified real property, usu. with a time limitation. [Cases: Mortgages 211. C.J.S. Mortgages §§ 274–276.]