Alienation Clause

Albert Camus' little-known Christmas novel, which flopped when it was released in November of 1947 and prompted Jean-Paul Satre to remark, "I didn't like the part where Dasher committed suicide. Frankly, I prefer White Christmas."

Ok, ok...actually, the alienation clause is part of a mortgage agreement. It states that the person holding the mortgage can't transfer the mortgaged property to someone else until the mortgage is paid off. And this is a Thing when mortgage rates have risen over a long period of time.

That is, Joe Bob Billy took out a $300,000 mortgage with a cheap 5% 30-year fixed-rate loan. Today's mortgage rates, seven years after Bob took out his loan, are 7.5%. Normally, the buyer of that home would want to assume the remaining $237,982 on Joe Bob's loan and then get a second (or contiguous) mortgage to cover the rest, albeit at those higher 7.5% interest rates. An Alienation Clause disallows that option.