Posted by Glen SoCal on March 23, 2002 at 12:29:11:
Yeah, sorry.
My excuse would be that it was late. I just reread the post and I can’t understand exactly what he or his friend is getting a loan for in the first place if he’s doing a wrap. I’m lost.
But, I don’t believe you sign personally for the loan that is secured by collateral. That doesn’t mean however that a lender cannot sue you for deficiency in case of a foreclosure. I’m going to post this on the legal forum…cause you know, I’m not sure.
Aussie Needs advice to close Wrap deal - Posted by Adan Weeks
Posted by Adan Weeks on March 21, 2002 at 21:18:47:
Gday everyone,
I have been reading the posts on this group for about a year now and I have learned much… many thanks to you all.
I have the following situation and seek advice:
Have found an ideal property to purchase for a wrap.
I have a buyer for the property.
I have all necessary funds to cover deposit and legal costs etc.
My Partner is going to apply for the loan (through the VA).
My questions:
Once title is taken in the name of a Land Trust, and my partner has signed over all beneficial interest in the property to the land trust… is my partner still held accountable for the loan or is the land trust?
Your partner is still going to be liable for the loan. Lenders may not have a problem with you taking title in a land trust or LLC, but they almost always will demand that you sign personally on the loan.
Posted by Glen SoCal on March 23, 2002 at 03:11:48:
The lender DEMANDING you to sign personally on the loan? TAKING title in a Land Trust or LLC?
How about, you deed he property to a Land Trust. And you assign beneficial interest of the trust to a person, or an LLC or some other entity.
People deed their asstes to trusts often. It’s a vehicle used to designate the disposal of assets to others, right?
If the ‘partner’ is attempting to convey his title to his friend without triggering the DOS, his signature is still on the loan. He may have aggreed to convey title (after a lot of payments or pay-off) of the COLLATERAL for that loan (the house), but, he still owes the money. That agreement hasn’t changed.
I.E. You don’t buy a house, you collateralize a loan with it.
Lenders want collateral, and they want to appraise the the ability of the barrower to pay, and then they choose to fund or not. Conveying title without their consent kind of screws up that agreement, yes?
But to say that the partner has to personally ‘sign’ now for the loan because he is transferring his property to a trust, I don’t think, is within the LEGAL power of the lender.
I’m a newbie. This is just what I read, or think I read. So check my facts.
All I’m saying is if you’re buying a property and getting a new loan from a bank, the bank is going to want you to sign personally on the loan regardless of how you take title to the property. The way I read Adam’s post, his partner was going to be getting a new loan.