conversion clause

conversion clause

(1) A clause in a mortgage loan that allows the borrower to convert from an adjustable-rate mortgage to a fixed-rate mortgage,or that allows the borrower to convert from interest-only construction financing to a lower interest rate and usually fully amortizing permanent financing. (2) A clause sometimes seen in leases and real estate sales contracts providing that any personal property left on the premises after lease expiration or after real estate closing may be discarded or retained, as the real estate owner desires, and will not constitute a conversion. (In other words,the owner has no responsibility to keep the property in a safe place and/or attempt to return it to the former occupant.)