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term:

Open Mortgage Clause

open mortgage clause n

: a mortgage clause which provides that payments go first to the mortgagee to the extent of its interest and which makes the mortgagee’s right to receive payment dependent on the mortgagor’s right to recover under the policy called also simple mortgage clause

Source: Merriam-Webster’s Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.
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