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As a practical matter....

Posted by Gary on June 14, 2003 at 9:55 AM

In Reply to: Non-exemption still stands... posted by Ward-CA- on June 12, 2003 at 9:11 PM

: : Ward,

: : Doesn't this Q&A at http://www.legalwiz.com/board.htm suggest otherwise?

: : 29. Can a junior lien holder foreclose without triggering a due-on-sale on the senior mortgage? - Top

: : The answer is "yes." Several court cases considered the issue and reasoned as follows: if a mortgage lien permits the borrower to further encumber the property with junior liens (ie, a 2nd mortgage), the the default and foreclosure of a junior lien is a reasonable consequence thereof. Thus, a 2nd lien holder can foreclose, take title subject to the 1st mortgage, and the due-on-sale has not been triggered. - Updated: July 12, 2002

: : David

: =•=•=•=•=•=•=•=•=•=•=

: David,

: The supreme law of the land is federal law. And in my reply to your post I cited the federal Garn-St. Germain Depository Institutions Act wherein Congress allows the imposition of the due-on-sale clause in all cases with just nine exemptions, and taking title via the foreclosure sale of a junior lien is not one of them.

: Look up the Garn-St. Germain regs. and you’ll come to the same inescapable conclusion.

: Hope this helps.


Ward:

As a practical matter, is it not rare that the senior liens foreclose if the winning bidders reinstate the senior liens and make monthly payments on a timely basis.

Gary


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