Any time title to a property changes hands,it can invoke the DOS clause. This will rarely happen unless the payments go into arrears.Banks are in the business of loaning money not owning RE.
It is also nice to meet you sir. The question I asked was more technical than practical. I realize that there is a legal way around almost anything and I'm not afraid or intimidated by a bank or a DOS.
I'm really just asking the question because I'm not sure that a lease-option or land contract actually triggers a Due on Sale. Since no "Sale" has actually taken place and only a option to buy has been given. The question was more academic; to clear up any confusion.
If a DOS was triggered by a lease-option it seems that a Sales Agreement could do the same thing, could it not? But the real question would be why a bank would call a mortgage when it's payments were being made.
I could be wrong, but a sale did take place with a Land Contract. Did the title transfer?.....only if a deed was recorded. The buyer has a equitable interest in the property when money exchanges hand and they sign on the dotted line.
As far as the DOS goes, I'm not going to speak on it. There have been sooooooooooo many post on the topic that I think there really isn't much more to be said about it.
A lease with the option to purchase would be something to in act the "due on sale" clause. The main point is that it doesn't happen. We have do L/O and subject to and never had problems with either. Read the first paragrapgh or the below link and read the words "at its option" the choose to call the loan and lose money in a forclosure or keep a proforming mortgage. Which sounds better to you?
Don't bet on it. Watch for interest rates to increase after the election in November. Folks holding a mort will inclined to invoke the DOS when they are holding at X rate and they the rate jumps to Y rate, higher. They will not be all that willing to leave the money on the table. 8-)
jfreud,
Glad to meet you.
Where ever did you get the idea that the DOS clause is triggered by either a Lease Option or Land Contract.
Do they holler out hey "trigger pulled envoke me" or do you suppose there are ways to help prevent this from happening.
Here is a good link for you:
http://www.legalwiz.com/dueonsale.htm
John $Cash$ Locke
Any time title to a property changes hands,it can invoke the DOS clause. This will rarely happen unless the payments go into arrears.Banks are in the business of loaning money not owning RE.
Mr. Locke,
It is also nice to meet you sir. The question I asked was more technical than practical. I realize that there is a legal way around almost anything and I'm not afraid or intimidated by a bank or a DOS.
I'm really just asking the question because I'm not sure that a lease-option or land contract actually triggers a Due on Sale. Since no "Sale" has actually taken place and only a option to buy has been given. The question was more academic; to clear up any confusion.
If a DOS was triggered by a lease-option it seems that a Sales Agreement could do the same thing, could it not? But the real question would be why a bank would call a mortgage when it's payments were being made.
Thanks
I could be wrong, but a sale did take place with a Land Contract. Did the title transfer?.....only if a deed was recorded. The buyer has a equitable interest in the property when money exchanges hand and they sign on the dotted line.
As far as the DOS goes, I'm not going to speak on it. There have been sooooooooooo many post on the topic that I think there really isn't much more to be said about it.
jfreud,
I believe you answered you own question. With foreclousures at an all time high, I would think the lenders plates are full enough.
Calling a preforming loan, meaning the payments are made on time and current, doesn't seem like the prudent thing to do at any time.
John $Cash$ Locke
A lease with the option to purchase would be something to in act the "due on sale" clause. The main point is that it doesn't happen. We have do L/O and subject to and never had problems with either. Read the first paragrapgh or the below link and read the words "at its option" the choose to call the loan and lose money in a forclosure or keep a proforming mortgage. Which sounds better to you?
http://www4.law.cornell.edu/uscode/12/1701j-3.html
Sire
DOS never happen??? :-D :-D
Don't bet on it. Watch for interest rates to increase after the election in November. Folks holding a mort will inclined to invoke the DOS when they are holding at X rate and they the rate jumps to Y rate, higher. They will not be all that willing to leave the money on the table. 8-)