Re: Wow Mark …this is great info for me - Posted by The Frisco Kid
Posted by The Frisco Kid on April 21, 2006 at 23:24:29:
Joe
First the Garn Act does not address this and because it doesn’t address this anywhere in the act, it is not exempted from enforcement under the act.
Second a lender staying a lender is one thing but when that lender becomes an owner subject to a senior loan with a due on sale clause, they are just another new owner with no special privliges and they are not expempted by any statute or case law anywhere no matter what Bronchick says, and I doubt he said they were nonenforceable but likely used lawyer speak for maybe this or maybe that. I am a gambler and would be willing to bet on the outcome of any test case if one shows up.
Plus just think about it, if I wanted to take over a property with a nice first mortgage on it, I could just get together with the seller, have him give me a very small second and then have him default and I could then foreclose and just take over the first no matter how they felt about it, or do something along those lines, not going to give it too much thought, but I’m sure the scammers would come up with sonething.
The greater truth is the senior lender just avoided a foreclosure action and as long as everything is ok on their loan it’s best just to let sleeping dogs sleep.