Due on sale....is anyone seeing this

[Ryan Taylor]

Question....with rates where they are...and where they are headed for that matter...anyone doing a sub to deal...is anyone experiencing a lender exercising the due on sale clause...I mention rates because, why would a lender not call a note that is 3.75 to recoup their money so it could be lent at the higher rate...with the spare time lenders now have to do more audits...has anyone experienced this...I get that lenders are in the business to collect payment and not own property...but if they could recover money lent at a lower rate to lend at a higher rate...why would they not...educate me....please

[Account Closed]

Quote from @David A Lisowski:

@Mike Hern

Quite literally from the CFPB, but maybe there's something more recent:

https://www.consumerfinance.gov/ask-cfpb/what-is-a-demand-feature-what-does-it-mean-if-the-demand-feature-is-checked-off-on-my-closing-disclosure-en-1997/

"What is a demand feature? What does it mean if the demand feature is checked off on my Closing Disclosure?

The Closing Disclosure has a statement that reads "Your loan has a demand feature," which is checked "yes" or "no." A demand feature permits the lender to require early repayment of the loan.

If the demand feature is checked "yes," the lender can require that you immediately pay the entire loan balance (principal and interest) at any time. The lender can make this demand on you for any reason or for no reason. Be sure to check your Closing Disclosure and promissory note for any demand features. Think carefully about whether you want to agree to a demand feature."

I was in a "Due on Sale" claim that went all the way to the 9th District Court of Appeals. I won at every level. I'm not boasting, I just happen to know the arguments and the case law.