I am applying a HELOC. There is a clause for Assignment of Rents, saying " The Mortgagor unconditionally assigns and transfers to the Lender...

Question

I am applying a HELOC. There is a clause for Assignment of Rents, saying " The Mortgagor unconditionally assigns and transfers to the Lender all the rents and revenue of the Property..." I am wondering if this means that as soon as I rent the property out, I have to pass the rental income to the lender? I googled around and most people are saying this clause only kicks in when I default on the payment. Thank you!

Answer

Without reviewing the document in full: this clause routinely applies in the event there is a default on payment of the HELOC. It is part of the HELOC lender's ability to collect the payments due upon default of the loan.