Posted by Ken (in Iowa) on September 10, 2003 at 10:58:18:
Presuming for the sake of argument that what you say is correct, you seller would face the problem of a foreclosure against his “life record.” I suppose some sellers could be motivated enough (or convinced that they’ll never get their credit straightened out enough for it to matter) so they might allow it, but I suspect you’re talking about a pretty small percentage of folks.
I’d be interested in hearing what the more learned legal folks on the board would say about your premise, just for fun.
Sub to 2nd = no approval loan? - Posted by Gene Texas
Posted by Gene Texas on September 10, 2003 at 10:03:02:
Of the nine exemptions on transfer of title in the Garn-St. Germaine Act #1 says ?the creation of a lien or other encumbrances subordinate to the lender?s security instrument which does not relate to a transfer of rights of occupancy in the property?. Let?s say a private lender-investor loans me $10,000 on a Sub2 loan takeover on a 2nd lien and 6 months later I default. The private lender-investor forecloses on the 2nd without paying off the 1st. Does this mean because of his position as 2nd lienholder he can now start making payments on the 1st and he is exempt from the Due on Sale clause and any lender adverse actions? If so, this is kind of like the No Approval Assumption. What would prevent an investor from making a token loan to a motivated seller and then foreclosing on him simply with the intent to get a no approval assumption?
Thanks!
GeneTx