A lender requested that the entire loan balance be paid immediately because the property on which the loan was made had been sold. What clause in the mortgage loan allows this?

A prepayment clause permits the borrower to pay off the loan early without incurring a penalty. While it provides flexibility to the borrower, it does not address the lender's rights in the event of a sale, making it unrelated to the scenario where the loan must be paid immediately upon property transfer.

The condemnation clause pertains to situations where the property is taken by eminent domain. It allows the borrower to receive compensation from the government in such cases, rather than dealing with loan repayment upon property sale. This clause is focused on government acquisition, not private transactions.

A defeasance clause typically states that the mortgage is voided once the loan is fully paid off. It does not allow the lender to demand immediate payment upon sale but rather confirms that the mortgage obligation ceases upon full repayment. Thus, it does not apply to the immediate payment scenario described.