Posted by BC on August 07, 2007 at 11:24:06:
Thank you sooooooooo much.
Which Steps To Take - Posted by BC
Posted by BC on August 06, 2007 at 13:29:27:
Hello,
Can someone advise me on what steps to take when one wants to put there home in there company’s “LLC” name.
Thanks
Re: Which Steps To Take - Posted by Rich-CA
Posted by Rich-CA on August 06, 2007 at 18:34:11:
I would not send a letter to a mortgage company advising them of the change. The change of Title does trigger the Due On Sale clause and with interest rates rising, you don’t want to advertise this.
To make the transfer you can prepare a “Quit Claim Deed” and file it with the County Recorder where the property is located.
Re: Which Steps To Take - Posted by MatthewMStefanik
Posted by MatthewMStefanik on August 06, 2007 at 13:38:15:
Call a title company and tell them what you want to do. They can prepare the deed from yourself to your entity. If you currently have a mortgage, you may want to contact your lender or send them a letter to advise. They won’t know it is your entity and will seem as a transfer of ownership, which triggers your mortgages due-on-sales clause.
Re: Which Steps To Take - Posted by MatthewMStefanik
Posted by MatthewMStefanik on August 07, 2007 at 04:28:16:
The reason you contact your lender is to let them know you have not transferred interest in the property. A “quit claim deed” does exactly the same thing and does not help you. It also appears to be a transfer of interest. If you inform your lender of the change and the reason why, they cannot trigger your due-on-sales clause and force you to re-qualify because there has been no sale or transfer of interest, therefore it is not due. Also, if you ask any title company, they will tell you a warranty deed is always preferred because you are warranting the status of the title.
- Matthew M. Stefanik
Re: Which Steps To Take - Posted by BC
Posted by BC on August 07, 2007 at 07:27:41:
Thanks for the feedback, but I think I’m not understanding the MORTGAGE DUE ON SALE CLAUSE. It seems that if I contact them and let them know of the transaction, this clause will go into affect no matter which form I use to prepare the transaction. ie. quick claim deed/warranty deed. Is this true.
Re: Which Steps To Take - Posted by Rich-CA
Posted by Rich-CA on August 07, 2007 at 09:54:31:
You would need to read the exact clause on you Note. The ones I have read do not support that interpretation and the one time I informed a lender, they said they do not care because I can sell my interest in the LLC without their knowing it and they ordered me to undo it (which I did not). I then read the relevant portion of the Note and the terms are not open to interpretation (at least by anyone who hopes to win if it gets to attorneys and court). Any transfer of interest counts. The criteria is that the names on the deed and the names on the Note must match.
Re: Which Steps To Take - Posted by MatthewMStefanik
Posted by MatthewMStefanik on August 07, 2007 at 07:38:45:
A due-on-sales clause in your mortgage means if you sell your property your mortgage is due (must be paid off). If you transfer your property to your entity, the lender will not know that it was not a sale and therefore may call your loan due. The purpose of notifying them is to let them know that you did not sell your house, but rather transferred the property to your own entity for estate planning purposes (or whatever the case may be). As far as your title is concerned, it is better to transfer with a warranty deed. So, to answer your question, whether you transfer title with a warranty deed or quit claim deed, to your lender, it appears as a sale and they may then call your loan due. I suggested you notify them so there is no confusion.
Besh Wishes,
Matthew M. Stefanik