Posted by Sean on September 16, 2003 at 11:11:33:
A land contract will set off a DOS, but a Land Trust does not… the problem is not the trust, the problem is your seller showed the bank that he not only put it in a trust, but then sold the beneficial interest in the trust to you…
You can place a property in a Land Trust without triggering a DOS clause. Unless the laws was recently changed, which I doubt.
Country wide /Land Trust Due on sale - Posted by Markr
Posted by Markr on September 12, 2003 at 22:40:37:
Anyone out ther had to deal with Country Wide calling a loan due after it was transfered into a land trust? They have sent me a letter. Thanks Mark
Re: Country wide /Land Trust Due on sale - Posted by Thomas K. Standen
Posted by Thomas K. Standen on September 14, 2003 at 10:59:41:
I have found over the years when you have a question concerning the right, obligations, and duties of lenders, it is always appropriate to take a look at the statute concerning the issue.
I have listed the section from the due on sale section of the Code (Garn St. Germain Act) below. You will find the section concerning trusts, and it is clear from the reading of the section, that if the owner of the trust kept a beneficial interest in the trust when it was transferred, then the loan cannot be called due. However, if the owner of the trust did not do so, then the loan can be called due.
· United States Code
o TITLE 12 - BANKS AND BANKING
§ CHAPTER 13 - NATIONAL HOUSING
Sec. 1701j-3. Preemption of due-on-sale prohibitions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon -
(1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;
(2) the creation of a purchase money security interest for household appliances;
(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
(4) the granting of a leasehold interest of three years or less not containing an option to purchase;
(5) a transfer to a relative resulting from the death of a borrower;
(6) a transfer where the spouse or children of the borrower become an owner of the property;
(7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or
(9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.
Hopefully this will be of assistance to you and others that may have the same problem.
Thomas K. Standen
North American Loan Servicing
tom@sellerloans.com
Re: Country wide /Land Trust Due on sale - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 13, 2003 at 23:30:41:
Mark R-------------------
Not after a trust. However, the did foreclose on a house I took subject to. You need to take them seriously. Sell or refinance as soon as you can.
Good InvestingRon Starr*****
I’m curious as to how they found out - Posted by gerald(tx)
Posted by gerald(tx) on September 13, 2003 at 18:43:17:
Mortgage companies have no spies down at the courthouse, so how was it triggered?
Were you late on payments? Did you send the insurance in with the trust as co-benificiary?
Re: Country wide /Land Trust Due on sale - Posted by Todd-ID
Posted by Todd-ID on September 13, 2003 at 09:31:40:
What did the letter say? Did they call it due or what?
Todd
Re: I’m curious as to how they found out - Posted by markr
Posted by markr on September 13, 2003 at 19:37:25:
The seller decided he did not want to have the loan in his name anymore so he sent in our subject to contract and trust to cw and said he no longer owns the property (even though he signed a due on sale disclosure) He and country wide are a great team.
Re: Country wide /Land Trust Due on sale - Posted by markr
Posted by markr on September 13, 2003 at 10:11:00:
They sent me 2 letters one saying It has come to are attention a transfer of title was done without consent and the may call loan due The other that it does not consent to a transfer into trust because they decline to render an opinion on validity of trust document.But then goes onto says if trust meets requirements of Garn-St Germain Act then they don’t need consent for tranfer. Makes sense huh Country Wide for ya
Re: I’m curious as to how they found out - Posted by Nate(DC)
Posted by Nate(DC) on September 14, 2003 at 24:54:45:
ONCE AGAIN! My theory that the loan will only be called when someone tells the lender is still 100% on target!
NT
Re: I’m curious as to how they found out - Posted by gerald(tx)
Posted by gerald(tx) on September 13, 2003 at 20:31:11:
Aha! Let me ask further, why did he want the loan out of his name? What triggered this? Were any payments late? Was he carrying a second and figured he could get his money now by forcing a refinancing? Was he wanting to buy a new home?
Did he have buyer’s remorse and after he got his finances in order, figured he got took on the deal and wants his house back?
Did he understand at your closing that he was in no way to ever contact his mortgage company again? You really have to drive this point home with them!
I’d really like to hear the rest of this. There’s got to be a reason, other than his just being a dumba**!
All may not be lost if this was a HUD/any govt guarantee loan. HUD must grant permission to foreclose and to my understanding, never has done so.
Re: Country wide /Land Trust Due on sale - Posted by Todd-ID
Posted by Todd-ID on September 13, 2003 at 11:30:30:
I would not respond to any of the letters and they will probably not pursue it. In the mean time I would be working with my lender to refinance it if they call it due. Good luck and keep us posted.
Todd
Re: Country wide /Land Trust Due on sale - Posted by jeff
Posted by jeff on September 13, 2003 at 17:49:40:
Countrywide is a buyer of all loans. They ride them all the way out so they want every dime they can make. It was like pulling I teeth to get PMI dropped and then they got mad when I used my appraisor and not thiers, at a $200 higher rate. I too would look to refince, a land contract does set off the due-on-sale clause, that is not to say there are not ways around it some people make a living at beating it. Some companys may not even care. Countrywide is tight. Good Luck.