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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: uncooperative private lender in sub -2 Posted by Rick Harmon on June 04, 2010 at 7:25 PM In Reply to: uncooperative private lender in sub -2 posted by Ellis on June 04, 2010 at 6:07 PM Say that with pride, Ellis: Bottomfeeder™ In order for her to foreclose, she (the 1st bene) must declare a breach. The only action that you'd be taking would be recording of Mr. Seller to Mr. Seller, trustee of his own trust, and perhaps a subsequent trust transfer deed to you as trustee of the bump-tee-bump trust. There would be no recorded taxable event as far as the world sees, nor the tax assessor. If you don't show a proof positive breach, she'll have a hard time convincing a foreclosure trustee to proceed with a default, NTS and subsequent trustee sale. If you really want to get devious, have seller agree to a stipulated order and get it signed by judge (Now I got you thinking, huh!). Also, for your convenience, I've included a summary of the Garn St.Germain Act: Garn St. Germain Act re: Loan Assumption This whole issue was settled in the 1982 federal act called the Garn-St. Germain Depository Institutions Act. According to the Act there are only nine exceptions to a lender’s ability to enforce its due-on-sale clause and they are: (d) Exemption of specified transfers or dispositions With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon – (1) the creation of a lien or other encumbrance subordinate to the lender's security instrument which does not relate to a transfer of rights of occupancy in the property; (2) the creation of a purchase money security interest for household appliances; (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; (4) the granting of a leasehold interest of three years or less not containing an option to purchase; (5) a transfer to a relative resulting from the death of a borrower; (6) a transfer where the spouse or children of the borrower become an owner of the property; (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; (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; or (9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board. Follow Ups: Re: uncooperative private lender in sub -2 Ellis 10:31 PM, 06/05/10 (1) getting interesting:next move Ellis 8:27 AM, 06/10/10 (0) Post a Followup: Name : E-Mail : Subject : Comments: : Say that with pride, Ellis: Bottomfeeder™ : In order for her to foreclose, she (the 1st bene) must declare a breach. : The only action that you'd be taking would be recording of Mr. Seller to Mr. Seller, trustee of his own trust, and perhaps a subsequent trust transfer deed to you as trustee of the bump-tee-bump trust. There would be no recorded taxable event as far as the world sees, nor the tax assessor. : If you don't show a proof positive breach, she'll have a hard time convincing a foreclosure trustee to proceed with a default, NTS and subsequent trustee sale. : If you really want to get devious, have seller agree to a stipulated order and get it signed by judge (Now I got you thinking, huh!). : Also, for your convenience, I've included a summary of the Garn St.Germain Act: : : Garn St. Germain Act re: Loan Assumption : This whole issue was settled in the 1982 federal act called the Garn-St. Germain Depository Institutions Act. According to the Act there are only nine exceptions to a lender’s ability to enforce its due-on-sale clause and they are: : (d) Exemption of specified transfers or dispositions : With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon – : (1) the creation of a lien or other encumbrance subordinate to the lender's security instrument which does not relate to a transfer of rights of occupancy in the property; : (2) the creation of a purchase money security interest for household appliances; : (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; : (4) the granting of a leasehold interest of three years or less not containing an option to purchase; : (5) a transfer to a relative resulting from the death of a borrower; : (6) a transfer where the spouse or children of the borrower become an owner of the property; : (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; : (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; or : (9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board. 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