Know What Your Mortgage Says Regarding Eminent Domain Ahead of Time
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.