Search results
A mortgage with a “dragnet clause” is an “offer” by the mortgagor to the bank to provide the security of the mortgage for advances of and when they were made. It can be said that the “offer” was not accepted by the bank when a subsequent advance was made because of a new security.
Dragnet clause is a clause in a mortgage deed stating that a mortgage secures all the debts that the mortgagor may at any time owe to the mortgagee. It is also known as Anaconda clause or Mother Hubbard clause.
The parties having conformed to the "blanket mortgage clause" or "dragnet clause," it is reasonable to conclude that they also agreed to an implied understanding that subsequent loans need not be secured by other securities, as the subsequent loans will be secured by the first mortgage.
The Security and Pitfall of Dragnet Clauses. Published 01 October 2018, The Daily Tribune. The long and tight reach of a real estate mortgage contract is oftentimes amplified by the so-called Dragnet Clause. Otherwise referred to as Blanket Mortgage Clause, this ostensibly innocent stipulation extends the applicability of a contract of a real ...
Definition: A dragnet clause is a legal term that refers to a clause in a contract that allows a lender to seize any and all assets of the borrower, even those not specifically listed as collateral, in the event of a default.
As used in some loan agreements (or security agreements), dragnet clauses give the lender greater credit support from the borrower. These clauses provide that collateral given to secure one loan from a lender to a borrower also secures other obligations of the borrower to the same lender.
Mar 30, 2022 · What is a dragnet clause? A dragnet clause is a clause in a collateral document that purports to expand the scope of the obligations being secured by such collateral to all debts of the borrower to the lender, whenever and however arising.
Apr 17, 2024 · A dragnet clause, also known as a mother Hubbard clause or a cross-collateral clause, is a legal term used to describe a clause in a contract that grants a lender the authority to seize all assets of the borrower, including those not explicitly listed as collateral, in the event of a default.
A standard form of cross-collateralization clause found in a loan agreement or security agreement in some consumer and corporate loan transactions. This Standard Clause has integrated notes with important explanations and drafting and negotiating tips.
The issue is whether the all-embracing or dragnet clause contained in the first mortgage contract executed between the parties for the security of the first loan could authorize the foreclosure of the property under the mortgage to secure a second loan despite the full payment of the second loan.
