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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Sounds Like Exception #6 of Garn-St.Germain Posted by SeanW on June 27, 2003 at 2:40 PM In Reply to: can this triger the due on sale clause? posted by g.castro on June 27, 2003 at 10:19 AM This was what Ward last said about due-on-sale ------------------------------------------------- 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 it’s 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: Post a Followup: Name : E-Mail : Subject : Comments: : This was what Ward last said about due-on-sale : ------------------------------------------------- : 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 it’s 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. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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