Posted by Bud Branstetter on February 20, 2001 at 09:36:14:
The owner has every legal right to put his property in a land trust. Where you violate the DOS agreement is when you assign all of their interest to you. Of course the assignment is not public information so the lender is not going to find out.(hiding the elephant)
Now the PACtrust does it a little different. There are only a few clauses different but the main thrust is that the owner retains an interest in the trust. Of course if you buy him out you contractually agree that he will forfeit that interest at the end. It is much easier to make a deal if those equities can be deferred. A little cash now, some later. You could do the same thing with an owner financed second but then you would probably want it recorded, thereby painting a big target on the side of the elephant you were trying to hide.