Anaconda clause refers to a provision in a mortgage agreement that allows the mortgage to secure all debts the borrower may owe to the lender at any time. This clause is named for its tendency to envelop the borrower in a web of debt, often without their full awareness. It is also known as a dragnet clause or mother Hubbard clause.
Anaconda clauses are commonly encountered in mortgage agreements and are significant in the fields of real estate and contract law. They are often scrutinized in legal practice due to their potential to create ambiguity regarding the extent of the borrower's obligations. Users can manage these clauses through legal forms and templates, ensuring they understand their implications before signing any agreements.
Here are a couple of examples of abatement:
(Hypothetical example) A homeowner takes out a mortgage that includes an anaconda clause. Later, they take out a personal loan from the same lender. If they default, the lender can claim against the mortgage for both the mortgage debt and the personal loan, even though the borrower may not have anticipated this outcome.
Examples of state differences (not exhaustive):
| State | Notes |
|---|---|
| Alabama | Anaconda clauses are closely scrutinized and may be interpreted strictly against the lender. |
| California | Ambiguities in dragnet provisions are interpreted against the lender's interests. |
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Anaconda Clause | Secures all debts of the borrower to the lender. | Broader in scope, may include future debts. |
| Dragnet Clause | Similar to anaconda, but may have different legal interpretations. | Often used interchangeably with anaconda clause. |
| Mother Hubbard Clause | A provision that covers all assets or debts not specifically mentioned. | More general, not limited to mortgage agreements. |
If you encounter an anaconda clause in your mortgage agreement, consider the following steps:
Browse our library of 85,000+ state-specific legal templates.
It is a provision in a mortgage that secures all debts the borrower may owe to the lender.