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Tools used to sidestep the due on sale clause

Posted by Ward-CA- on April 13, 2003 at 7:11 AM

In Reply to: Due-On-Sale Sidesteps posted by SeanW on April 12, 2003 at 7:39 PM

: OK. To make this post a question, isn't it possible that attempting to change assignment of the trust deed, even to a THT, may in fact draw more scrutiny that doing nothing? And that the first plan of attack on a buyout, would be to try and assure the trustor he won't get stuck with more bills, before talking about assigning the trust deed at all?

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Sean,

What we’re doing really works. No lender has ever discovered that I took over their loan. Nor have any of my graduates ever called me to report that a lender discovered their takeovers.

So let’s go over the documentation the lender sees and explain why it’s used:

A. A copy of the recorded transfer deed from the defaulting owner to me as trustee of his trust. To the lender it looks like a transfer of the property to what they presume to be their borrower’s living trust. Why? Because the trust is titled in their borrower’s surname. And the transfer tax amount shows zero-no sale.

B. A copy of a Certification of Trust bearing the notarized signature of the trustee, showing the borrower as the beneficiary of their trust.

C. The cover letter explains, that as a simple courtesy their borrower is informing them that she has transferred her property out of her name and into her trust, as witnessed by two enclosures (copies of transfer deed and the certification of trust).

I can understand one’s urge to tinker and dismiss things that aren’t of their own creation. Or assume that some things are immaterial because no one explained them. But there’s a lot of real trial and error behind this method of sidestepping the due on sale clause. And it works consistently, every time it’s used without adulteration.

If you do decide to use the approach suggested in your post I’d be very interested in the subsequent reaction of the lender.

Hope this helps.


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