Posted by JohnBoy on January 23, 2002 at 03:59:31:
Wouldn’t having control of the “right” to have an interest in the property BE an interest in the property?
Having an agreement that allows me control of ANY right that would allow me to purchase a property would, in itself, give me an interest in the property. Especially if the property was worth more than what my option price is. That would give me an equitable interest in the property since I paid the seller for the right.
Since an option gives the right to purchase the property then that would be an interest.
Here is what the definition of “interest” is written in a legal dictionary: (I capitalized the parts that would apply here)
interest
n. 1) ANY and all, PARTIAL or total RIGHT TO PROPERTY or for the use of property, including an easement to pass over a neighboring parcel of land, the right to drill for oil, A POSSIBILITY OF ACQUIRING TITLE UPON THE HAPPENING OF SOME EVENT, OR OUTRIGHT TITLE. While most often referring to real property, one may have an interest in a business, a bank account or any article. 2) the financial amount (money) paid by someone else for the use of a person’s money, as on a loan or debt, on a savings account in a bank, on a certificate of deposit, promissory note or the amount due on a judgment. Interest is usually stated in writing at the time the money is loaned. There are variable rates of interest, particularly on savings accounts which depend on funding from the Federal Reserve or other banks and are controlled by the prevailing interest rates on those funds. Maximum interest rates on loans made by individuals are controlled by statute. To charge more than that rate is usury, the penalty for which may be the inability of a creditor to collect through the courts. The interest rates demanded by lending institutions are not so restricted. The maximum legal interest often granted by the courts on judgments is set by the law of the state. Simple interest is the annual rate charged for a loan, and compound interest includes interest upon interest during the year. 3) one’s involvement in business, activities or with an individual which is sufficient to create doubt about a witness being objective-damaging his/her credibility. 4) one’s involvement in business, activities or with an individual which is sufficient connection to give a person “standing” (the right based on interest in the outcome of the lawsuit or petition) to bring a lawsuit on a particular matter or act on behalf of other people.
Does an “option” not give me the right of a possibility of acquiring title upon the happening of some event,… such as, exercising the “option” I have???
Countrywide’s " due on sale police" ? - Posted by Alan-Baltimore
Posted by Alan-Baltimore on January 21, 2002 at 19:54:55:
I had a strange phone call today from someone who said that he was a home inspector from Countrywide Mortgage.
Here’s the background:
I recently took over (via L/O) this house from a woman who was two months behind in her payments. I told her I wasn’t prepared to start my L/O until Feb. so I would have enough time to find a tenant. I did agree to lend her the money for the back payments and she would pay me back over the next twelve months. I mailed in the payments last week but they have not yet cleared Countrywide’s offices (I checked on the Web). My L/O payments will start Feb. 1 and I got a (sub-)tenant/buyer lined up lined up today.
Anyway, this inspector got my number from my big rent-to-own sign attached to the front door and said that he had been sent to see if the house was vacant. He further told me that if it was vacant, Countrywide would send someone out to winterize the property. I told him that the owner, who lives out of state, had hired my company to manage the property and that the house would be re-occupied next month. I also informed him that the utilities were on and the house was in no danger of freezing. He said he would put “unknown tenant” on his form and that I might get a follow-up call from Countrywide.
I’m not overly concerned about this since the owner was renting out the property until her tenant left in December. My guess is that when the owner missed two payments, Countrywide started to get worried about that value of their collateral should the pipes start freezing, etc. I just wanted to see if anyone else here had a similar experience and give a heads up to others since I remember recently reading a thread here about Countrywide exercising the dreaded “due on sale” clause.
Standard practice when a loan is in default… they send folks by to check and see if the properties… are vacant, winterize… and later on they send someone out to give a BPO… or a value of some type.
Send the payments and they’ll be happy. Make sure the loan number and address is on the checks… also, lately we’ve even had a couple problems where the loans were sold… loan numbers changed without us being notified… or sometimes them telling us they cant find the loan.
I have heard in the legal forum that countrywide is calling loans due because of the “due on sale” clause. Who knows why they would want to do this, but anyway… If you L/O the house the title hasn’t transferred so they can’t call the loan due anyway.
Posted by Johnnie on January 21, 2002 at 21:22:43:
Yes, I too heard that Countrywide was calling due the homes that they found had violated the due on sale clause. I believe if you are buying the house on a lease option the contract has not been breached. The clause is only violated when bought subject-to according to my limited understanding. It is ridiculous to me that they would even send someone out if the payments were made…Go figure…
Posted by JohnBoy on January 21, 2002 at 21:42:46:
Any OPTION is a violation of the due on sale clause. A lease for 3 years or less doesn’t violate the DOSC, but having an OPTION does. Lenders don’t call loans due over a L/O, but they do have the right to if they wanted to.
I am not 100% positive on this, but… the title hasn’t transferred; so how can they call the loan due? Having an “option” to buy the house doesn’t transfer ownership in any way.
Posted by JohnBoy on January 22, 2002 at 13:54:06:
I don’t know what the exact wording is in countrywide’s mortgage, but I’ve seen mortgages that include “options”. I had one with United Lending that said an “option” included in their DOSC.
Wouldn’t selling you an option on my property give you an interest in the property?