Definition
A notice of acceleration is a notice sent by a lender to a homeowner stating that the entire balance of a mortgage is due.
Analysis
When a borrower becomes delinquent on a mortgage, the lender may decide to call the entire balance of the loan due. This step must take place before the lender can foreclose on the home.
The lender is not required by law to send advance notification to accelerate, or call due the entire balance of the loan. Once the borrower is sufficiently delinquent, the lender has the right to immediately demand the entire balance of the loan. In this case, the notice of acceleration is not an advance notice, but simply a notice stating that the loan has been accelerated.
Some mortgage agreements, however, do require the lender to provide an advance notice of acceleration. In these cases, the lender must send a notice of acceleration stating that the loan will be accelerated if the borrower remains delinquent after a specified period of time.
