What clause in a mortgage allows a lender to demand immediate payment of the loan balance under specific conditions of fraud?

The correct answer is the Due-on-Demand Clause. This clause gives the lender the right to demand full repayment of the loan balance under certain circumstances, particularly connected to issues like fraud or default on the mortgage. If the lender suspects fraudulent activity related to the loan, such as misrepresentation of financial information by the borrower, the due-on-demand clause allows them to act quickly and protect their financial interests by calling for the entire loan amount to be paid immediately.

In this context, the due-on-demand clause serves as a safeguard for lenders, enabling them to mitigate risks associated with fraud and ensure they do not continue to hold a loan that is based on false or misleading information. It allows lenders to have more control over their investment and provides them with the means to react promptly to potential threats to loan repayment.

While there are other clauses mentioned, such as the due-on-sale clause which pertains to the sale of the property rather than fraud, and the acceleration clause that generally allows for the entire loan to become due if specific events occur (typically include default, not necessarily fraud), the due-on-demand clause specifically addresses situations where immediate repayment is warranted due to fraudulent activity. The foreclosure clause, on the other hand, deals primarily with the lender's rights to take possession