What is a Waiver of Exemption?
A waiver of exemption is a clause in a contract that allows a creditor to seize property that state laws may exempt from seizure.
How Does a Waiver of Exemption Work?
Let's assume 65-year-old John Doe borrows $250,000 to buy a house. In his closing documents is a waiver of exemption, which he signs.
Five years go by, and John loses his job. He defaults on the mortgage and goes into foreclosure. Even though John lives in a state that prohibits the seizure of houses from senior citizens, his signature on the waiver of exemption allows the lender to go around the state law and seize the house anyway.
Why Does a Waiver of Exemption Matter?
A waiver of exemption can expose borrowers to considerable risk, which is why they are now illegal in loan contracts.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
When I received my MBA 20 years ago, I thought I was pretty well versed in the world of finance. But when I got to Wall Street that summer, I was quickly overwhelmed....
Read More →
Some of the most successful investors have developed very effective investing tricks that help them appear to magically...
Read More →
Debit cards look and feel like credit cards, but they offer paperless, electronic withdrawals from your checking or savings account. They're...
Read More →
Parents, imagine this scenario: You're at home on a leisurely Saturday afternoon enjoying the peace and quiet of an empty house, when, suddenly, you receive an alert on your smart phone. It...
Read More →
Low-risk, liquid investments that, upon purchase, do...
Read More →
