What happens in a mortgage when acceleration is invoked?

In a mortgage context, invoking acceleration refers to a situation where the lender activates a clause in the mortgage agreement that allows them to demand the full repayment of the remaining loan balance immediately, rather than continuing to collect scheduled monthly payments over the term of the loan. This typically occurs after a borrower has defaulted on the loan, such as failing to make required payments.

The acceleration clause is designed to protect the lender's interests by enabling them to recover the entire amount owed at once instead of waiting for future payments that may not come due to continued default. This means that the lender can legally pursue the borrower for the entire remaining mortgage balance rather than just the monthly payments that have been missed.

This process does not involve extending the payment period, assessing only a late fee, or forgiving the loan. Instead, it accelerates the obligation to repay the debt immediately, reflecting the lender's efforts to mitigate risk and recover their investment in the event of default.