Legal Definitions - Mother Hubbard clause

Definition: A Mother Hubbard clause is a clause in a mortgage agreement that states that the mortgage secures all the debts that the borrower may owe to the lender at any time. This means that if the borrower takes out any additional loans or owes any other debts to the lender, those debts will also be secured by the mortgage.

Example: Let's say that John takes out a mortgage to buy a house. The mortgage agreement includes a Mother Hubbard clause. A few years later, John decides to take out a personal loan from the same lender. Because of the Mother Hubbard clause, the personal loan is also secured by the mortgage on John's house.

Explanation: The Mother Hubbard clause is designed to protect the lender by ensuring that all of the borrower's debts are secured by the mortgage. This gives the lender more security in case the borrower defaults on any of their loans. However, it also means that the borrower's assets (in this case, their house) are at greater risk if they are unable to repay their debts.