WHAT IF THE BORROWER DOES NOT PAY HIS TAXES OR INSURANCE?
The borrower’s failure to pay taxes or insurance would constitute a default event under the mortgage. This would give the investor a number of remedies to choose from. The note and mortgage can be immediately accelerated with all principal and interest then due, foreclosure proceedings can be initiated, and the investor can pay the taxes or place insurance coverage and add the costs to the mortgage balance at the highest maximum interest rate provided, among other remedies.
