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Simple English definitions for legal terms
New York standard clause
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A quick definition of New York standard clause:
New York Standard Clause: This is a term used to refer to a specific type of clause in a mortgage agreement. It is also known as the Mortgage-Loss Clause. This clause outlines the conditions under which the lender can take possession of the property if the borrower defaults on the loan. It is a standard clause used in mortgage agreements in New York.
A more thorough explanation:
The New York Standard Clause is a term used in the insurance industry. It refers to a specific clause that is included in insurance policies, particularly in mortgage insurance policies. This clause is also known as the Mortgage-Loss Clause.
The New York Standard Clause is a provision that allows the insurer to pay the mortgage lender directly in case of a loss. This means that if the property covered by the insurance policy is damaged or destroyed, the insurer will pay the lender the amount owed on the mortgage, rather than paying the policyholder directly.
For example, let's say that John has a mortgage on his house, and he also has a mortgage insurance policy that includes the New York Standard Clause. If his house is damaged in a fire, the insurer will pay the lender the amount owed on the mortgage, rather than paying John directly. This ensures that the lender is protected and that the mortgage is paid off, even if the property is damaged or destroyed.
The New York Standard Clause is a common provision in mortgage insurance policies, particularly in the United States. It is designed to protect the lender and ensure that the mortgage is paid off in case of a loss.