When I bought a house, my bank, Chase (naming names!) made me sign a form saying that they had permission to repossess my house.
Not conditional on non-payment or anything. Not conditional on violation of the terms of the mortgage. Just a blanket document that said they could take it whenever they liked. Apparently the idea is that if I die and my survivors continue to live in the house, then they might have trouble foreclosing on the house because my survivors did not sign the loan agreement. Otherwise, they promised, this document would stay in a drawer somewhere and never be used.
I said that of course I would not sign this document, and they said that the bank would not issue the loan without it. At this point, at closing, what can I even do? Closing was a formality -- my lease had already run out on my previous place, movers had been arranged, HOA had signed off on the purchase and the mortgage terms, and the approval of the loan itself took a stupidly long time to get all the documentation necessary so I couldn't just go to another bank and start the whole process again (especially since they would probably make me sign the same damn form).
So I signed it, and may God have mercy on my soul.
You can edit it. The same way they don't expect you to read it, they don't read it either.
So just edit it to say what you agree with and move on (and don't make a fuss, call their attention to it - they should be reading these just as much as you should).
If I get presented with this document in the future, that's what I'll do. As it was I was incredulous and just assumed that it was a mistake that would benefit from having attention drawn to it. I think you may underestimate the thoroughness of the bank's representative at this proceeding. If they detected the modification, they would simply print out a new one and tell me I had to sign it, or reschedule the closing, which would have been unacceptable at the time, and because of the verbiage in the contract might have result in my offer being voidable by the seller.
Wow. Not a lawyer, but I can tell you that clause and their explanation are BS. The whole mortgage system doesn’t work if a bank can repo a house irrespective of payment on the loan. And the inheritance thing is long solved: any heir would inherit the property with the (legit) mortgage repo rights attached to it, so they wouldn’t be able to escape the loan repayment obligation either.
Fortunately, I doubt a judge would uphold that provision and find that you were forced into it for exactly the reason you gave.
Not conditional on non-payment or anything. Not conditional on violation of the terms of the mortgage. Just a blanket document that said they could take it whenever they liked. Apparently the idea is that if I die and my survivors continue to live in the house, then they might have trouble foreclosing on the house because my survivors did not sign the loan agreement. Otherwise, they promised, this document would stay in a drawer somewhere and never be used.
I said that of course I would not sign this document, and they said that the bank would not issue the loan without it. At this point, at closing, what can I even do? Closing was a formality -- my lease had already run out on my previous place, movers had been arranged, HOA had signed off on the purchase and the mortgage terms, and the approval of the loan itself took a stupidly long time to get all the documentation necessary so I couldn't just go to another bank and start the whole process again (especially since they would probably make me sign the same damn form).
So I signed it, and may God have mercy on my soul.