Posted by JohnWe (NoCA) on January 24, 2000 at 12:24:19:
Wow, big topic.
I recommend reading the How-To Article at this site by Bronchick entitled How to beat the due on sale clause (part 1 and 2).
If you still have ??'s after that, feel free to drop me a line.
Garn St. Germaine Act - Posted by Susan (N.Ca)
Posted by Susan (N.Ca) on January 21, 2000 at 15:16:49:
I’m trying to transfer property in the easiest way possible. I don’t want an appraisal, termite insp., title insurance, etc. My parents have an out of area mobile on 1/2 acre that they now owe $25k on (no more than a car loan). It’s scheduled to be paid off in 2006 and becuase of the age of the mobile I don’t want to extend the loan amortization. I’ve been told that the Garn St. Germaine Act makes it possible to do such a transfer without triggering the due on sale clause. Any idea where I can view a copy of this act? And, if my parents do transfer the majority of the ownership to me, and I just make the payments on her current mortgage, how do I deduct the interest expense? The 1098 would be issued to her. Any help would be greatly appreciated.
Susan
Re: Garn St. Germaine Act - Posted by Jim IL
Posted by Jim IL on January 21, 2000 at 19:59:47:
susan,
You may want to read the articles here and on www.legalwiz.com about the DOS .
Bill Bronchik offers some great advice and ways of structuring exactly what you are trying to do.
As for the Garn St. Germaine act you are reffering to, here is a small quote from it;
“”(d) Exemption of specified transfers or dispositions
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 -
(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?"
You can also do a search on www.findlaw.com and www.alllaw.com to get the entire wording if that makes you feel better.
Good luck,
Jim IL
Re: Garn St. Germaine Act - Posted by JohnWe (NoCA)
Posted by JohnWe (NoCA) on January 21, 2000 at 16:35:51:
I’ve never actually read the act, but I’m assuming you’ll find the details at your local legal library.
My understanding is that Garn St. Germaine allows your parents to transfer the property to you without calling the due-on-sale clause.
As for the IRS, as long as you can prove ownership of the property, you can write off the mortgage interest, regardless of who the 1098 goes to.
I think I would setup a land trust just to make things cleaner.
Re: Garn St. Germaine Act - Posted by Susan (N.CA)
Posted by Susan (N.CA) on January 24, 2000 at 11:29:35:
Thanks for the comments. I’ve never dealt with land trusts. Care to give me the hightlights?
Susan
Re: Garn St. Germaine Act - Posted by chris
Posted by chris on January 24, 2000 at 12:25:00:
You can read about land trusts at the articles section of this site. www.legalwiz.com is another good source, as well as www.cal-equity.com.
-Good Luck, Chris