Posted by Bill Young on July 31, 2002 at 15:47:29:
The Garn St Germain act explicitly states that any contract on the mortgaged property containing the granting of an option to purchase, regardless of the length of the lease, violates the DOS.
Bill Young
Why does L/O violate DOS? - Posted by James Buster
Posted by James Buster on July 08, 2002 at 20:07:54:
St-Germaine prevents the lender from calling the loan due merely because the property is no longer owner-occupied e.g. leased to third party. Why is the L/O deemed a constructive sale violating the lender’s due-on-sale clause when the sale isn’t actually consummated until the option is exercised? The option clouds title, sure, but since it’s junior to the lender’s lien it seems no more a nuisance than a 2nd mortgage would. So where, exactly, is the legal beef?
Re: Why does L/O violate DOS? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on July 09, 2002 at 08:23:59:
Because a lease, especially a long-term lease, combined with an option is often a sale in substance…this is why the act doesn’t protect leases over 3 years.
John Hyre