Posted by Chris on February 15, 2000 at 19:32:49:
Dee- I expect Bill Gatten to swoop in at any time;-} I am hearing a PACTrust posting in the background cleared for landing.
To meet #4 below use a seperate lease and option. If the bank has the manpower to look for every property tax increase I would be amazed. Even if they do see an increase in taxes how do they know what the cause is of that increase. A lot of digging on their part would have to occur. Property taxes do increase.
The Garn Act carves several exceptions in which the lender may not enforce the due-on-sale:
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 -
(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.