As early as the 1970s, several court decisions decided that alienation clauses were unenforceable. This has been especially true in California and has resulted in all sorts of creative financing efforts on the part of lenders. The 1982 thread St. German law put an end to this and largely allowed alienation clauses to apply. However, there are still a few exceptions, including: a common type of disposition clause, found in many trust securities, is as follows, from the U.S. Securities and Exchange Commission: If a mortgage agreement has an assignment clause, as most do, the total balance of credit is due once the borrower has entered into a sale of the real estate or transfer of ownership. In essence, this means that the proceeds of the sale will first be used to repay the loan before the money is paid directly to the seller.