after acquired property clause
after acquired property clauseA clause in a mortgage that “scoops up,”as additional collateral, property acquired after the original loan.The intent is to protect the lender in case the borrower has a defective title to the property at the time of the loan, but later cures those defects and gains full legal title. It is also intended to gain a security interest in contiguous land purchased later, and having some practical relationship to the mortgaged land.(In practice,the clause is usually buried in the fine print and allows lenders to increase the value of their collateral when that was never the original intent of the parties.)
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.