Posted by Rich on March 27, 2006 at 20:24:33:
I have 5 loans through Wells and had until January 5 through Citi. The “5” seems to be a hard fast rule with some lenders. WAMU however looks at the dollar value of what is loaned to a single borrower and cycles the loan off the list every 18 months. There are local lenders that will do the same kind of thing.
If you doi a wrap, will you be recording a change of ownership with the County? I’m sure there will be those who disagree, but read your DOS clause. Change of Title except to a Living Trust (which they have to allow by Federal law) violates the terms of most mortgages. They may not do anything, or they might. The issue is that unless you get permission in writing from them in advance you are in breach of contract and they have the right to call the loan due and payable.
A lender is not going to consider a wrap an asset. If you package it as a lease it won’t matter either. They have their own formula for calculating vacancies and rents that may have nothing to do with what you’re getting (I spent a couple of days arguing the formula with Citi and the would not budge).
Further if you have a wrap and the lender finds out, the additional income may be enough for them to call the loan due and make an offer with your buyer. You would not have a legal leg to stand on since a change of title breaches the contract.