Definition: The "mortgage 90-day rule" refers to a legal or regulatory requirement in the United States for borrowers who are purchasing a home with an existing mortgage, to take out a new one within a specified period of time (usually nine days) as part of their closing process. This rule is designed to protect both the lender and the borrower from being held liable if they default on the original loan due to unforeseen circumstances such as the borrower's failure to make payments or any other factors affecting their ability to repay the loan. The term "90-day rule" is not a legal requirement per se, but rather an industry standard that has been widely adopted by mortgage lenders and servicers. The 90-day rule generally applies when the closing of a new mortgage transaction involves the exchange of property ownership and transfers from the original borrower to a new owner, as well as any necessary paperwork and documentation. The specific details of the "90-day rule" can vary significantly depending on the country or jurisdiction in which the loan is being originated. In general, this rule ensures that borrowers are aware of their obligations under the loan agreement and the process involved when they decide to take out a new mortgage. It also provides stability for the lender and servicer by holding them responsible for any potential delays in closing due to unforeseen events. In summary, the "90-day rule" is an important legal document that helps borrowers understand their obligations under the terms of their loan, ensures compliance with regulatory requirements, and provides a reliable mechanism for resolving delays or issues related to property ownership transfers.

mortgage 90 day rule