How Does
"subject to" insurance policy work? Also i read and want to know in what order does a closing attorney do the title and ownership chain with a subject to and a land trust or is it necessary if i am going to hold or even live in the home without any problems?
[ Edited by ralphnatl on Date 04/05/2008 ]
First of all, you should never ask. You should be taking the property Sub2 with a Land Trust and having the owner assign the beneficial interest in the Land Trust to you.
There is a Federal Law that allows anyone to put their property in a Land Trust called the Garn-St Germain Depository Institutions Act of 1982.
Look it up. When it is put in a Land Trust, you get a letter from the former owner that states to the mortgage and insurance company that the property is in trust and that you are taking over and handling the management of the property.
I agree with putting the property in a land trust, but I think that assigning the beneficial interest (instead of simply deeding it into your own trust) is excessive.
Everyone seems to dance around the following:
garn-St. Germain Law states:
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property;
1) who says a land trust is an inter vivos trust
2) "not relate to a transfer of rights of occupancy"
This does affect the rights of occupancy.
People can say "just do it" all day long, buy does that make it legal?
Hi Thelemur,
How can you put a property in a Land Trust that you do not own? It must go into Trust through the seller and then transfer to you.
Yes, it is a bit much going into a Personal Property Trust and then an LLC, it depends on how much you want to protect what you are getting and have.
Hi cjmazur,
What about if an owner of a property, while living in it puts his property in Trust and then moves, but keeps his property and rents it out? or, How about the investor who buys a rental property and never lives in it, but puts it into a Trust for protection?
I could be wrong, but I think what cjmazur is trying to say is that the verbiage on the mortgage allows for transfer into a trust, but technically does not allow a land trust to be used.
Quote:
On 2008-03-19 18:50, jrichman65 wrote:
Hi cjmazur,
What about if an owner of a property, while living in it puts his property in Trust and then moves, but keeps his property and rents it out? or, How about the investor who buys a rental property and never lives in it, but puts it into a Trust for protection?
I have done many in 9 states, especially in Florida where I was residing until a short time ago. I now live in North Carolina and have done 7 in the last 8 weeks all with putting them into a Trust
Having the proper training is paramount to your success.[ Edited by JohnLocke on Date 03/20/2008 ]
Quote:
On 2008-03-19 18:50, jrichman65 wrote:
Hi cjmazur,
What about if an owner of a property, while living in it puts his property in Trust and then moves, but keeps his property and rents it out? or, How about the investor who buys a rental property and never lives in it, but puts it into a Trust for protection?
Neither of these are trying to "circumvent" the DOS clause, and I beleive both are dealt with in the law
Am I just missing it, or what? ... I do not see this "illegal", "unethical", etc. wording that people are speaking of.
The DOS (imho) has not placed any obligation of action (or inaction) on the seller or buyer. The DOS clause simply grants (imho) to the lender a specific right IF a certain action is taken. The seller does not seem to "breach the contract", etc. but has simply created a situation where the lender can take a specified action (accelerate the loan) IF THEY CHOOSE.
Just my thoughts.
I am curious to know why a transfer into a trust is not considered a "sale" and why it would not trigger the DOS clause. I like the idea of a trust being involved but grapple with the fact that the sale is taking place so as to not"trigger" the clause.
Has anyone ever done a subject to in which the bank later found out the sale occured and what was their reaction? I have a feeling I know the answer, but what about practical situation?
regards
Joe
[addsig]