Last Ditch Effort
If the loan gets called due and i only have
30 days can i then put it in a land trust at that time
due on sale panic
If the loan gets called due and i only have
30 days can i then put it in a land trust at that time
due on sale panic
Sure, I don't think it takes 30 days to do the trust thing. I'm not sure, I'm not a trust advocate.
However, I'd be spending my time finding a pile of cash, or a new loan; cuz it's still getting called due.
no way around it
I thought a land trust protected you from the due on sale clause
someone please explain
Thank You
Pete
I am not a lawyer .... If John Smith puts his property in a land trust where he is still the beneficial interest the bank can not call the loan due. Transferring the property title for estate planning is allowed by federal law.
Now you can use a trust to also hide ownership. So maybe John Smith put the property in a trust for estate planning purposes, and maybe he did it to transfer ownership. If you do it correctly, nobody can tell.
But since you are talking about DOS, I assum that John Smith has already deeded it to Joe Buyer. If that has already been recorded then there is a break in the chain of title and the trust thing will not help. You needed to have John Smith originally give ownership to Joe Buyer via a trust.
Brenda
It sounds like you've got it confused. A land trust can be a good preventative way to avoid the DoS clause but that's *before* the lender wants to called it due. A trust won't help you after the bank calls it due.
How it basically works is this way. There was a law passed in like '82 I believe (Garn St. Germaine Depository Institutions Act or something like that) which basically said that lenders can in fact call a loan due on sale or due upon any transfer of interest in the property. This was bad for real estate investors and others that like to (at least informally) take over people's payments on houses. Well, this act did leave open the possibility could transfer title to their property without the lender being allowed to call a loan due. It said that you would not be violating the DoS clause if you are putting the property into a trust as long as you remain the beneficiary of the trust. So, what RE investors have done is come up with the strategy of having a seller deed title to their property to the RE investor's hand-picked trustee. Then, they'll usually have the seller be the initial beneficiary of the trust and then immediately also have the person assign this beneficial interest over to the buyer.
This avoids the DoS clause because the only transfer of record (record at courthouse) is the initial title transfer to the trustee. If this is truly all that happens and the beneficiary remains the original owner then it is true that the lender cannot by law call the loan due. Since the assignment is not of public record then the lender won't know that the beneficial interest is not still in the seller's name. So, this *does not* technically get around the DoS clause; it just makes it harder for the lender to detect.
And, I should note that by doing this, you are not breaking any laws (afaik, imho). It just simply empowers the lender to call the loan due if they wish and oftentimes they really don't care.
I guess that goes a long way to explain this. Hope it helps.
BTW - what state are you from. The lender will have to foreclose and that should take a good chunk of time. You need to refinance.
I dont have a specific property Im just trying to cover all my bases
I live in California and im working off a nod list, And going to the court house every week
thank you alll for the information
Pete
powecjhlo,
Glad to meet you.
I heard that a land trust would cure the common cold, however you will stand about the same chance of this happening as stopping the loan from being accelerated should the lender call the loan due because of change of ownership.
If there is a change in the beneficial ownership of a property no matter how you try to conceal it, the lender has the option to call the loan due. I hear things like leave the seller as the beneficiary and hide the paperwork you receive from the seller appointing you beneficiary. Anytime you are not up front in your dealings as an investor you open yourself up to problems.
You will also hear things like it is done for anonomity, but here again I assure you when you are sued any attorney worth his salt in a deposition will ask if you are the trustee or beneficiary of any property. If you are then you either own up or commit perjury.
Now that I have said this if you fell comfortable with using a trust by all means do so, just understand what it really does and does not do.
John $Cash$ Locke
[addsig]
John,
How can you say these things when I know I seen you at your good friend Bill Gatten's seminar at the tci convention. He even recognized you as the guest of honor. Seems you were reminising about a fine Lolita at the Blue Foxx ......or was that another one? hmmm. If only he could see you now. LOL
Disclaimer: Not attempting to take any jabs. I am not well versed in trusts, Gatten style or otherwise. Just had to throw that in. I remember my Dad was there with me and he said "If what he's saying works, the man is a genius. But it sounds like it would take a Philadelphia lawyer to put it together." LOL
Larry
OK and that's not helpful
Can you add something to the subject
Pete
Quote:
"If what he's saying works, the man is a genius. But it sounds like it would take a Philadelphia lawyer to put it together." LOL
Larry
I believe the real genius is doing it simply. If you get the same results with and without a trust, do you really want to go to all that extra effort? I don't. What a waste of time. Upsets politicians, etc.
[addsig]
I guess I just want to point out a false assumption:
If the loan gets called due and i only have
30 days can i then put it in a land trust at that time
due on sale panic
If the bank accelerates througha Due on Sale clause you have a lot more than 30 days. They are going to tell you you have 30 days to pay them off. So that notice begins the clock (or in this case the calendar) running.
Ok, so the lender is not going to do anything for 30 days. And what are they going to do on day 31? Well, if you've called them and told them you're in the process of refinancing and given them the name of a lender or mortgage broker who is shopping the deal probably nothing. In fact if you keep communicating its probably going to be another 60 to 90 days before they get around to actually filing the foreclosure. If you are reasonably addept at the legal system you're going to file a counter claim of some sort which will stretch things at least another 60 to 90 days even if you loose on summary judgement. So a more reasonable time frame is more like 6 months than one. Get your refinance done in that period of time.