My attorney says I am not allowed to make an LLC

[Mordy Chaimovitz]

Ok. 
I Recently closed my 1st deal on 2 SFH's with a conventional loan. I wanted to transfer the properties into an LLC but my attorney says that technically it's against the clauses in my loan to transfer the loan to a different entity and I could be in default of the loan and the bank can come and ask for the money back.

now I am under the impression that many people do this anyway and the lender won't bat an eye, but am I making a mistaken assumption?

has anyone had any bad/good experiences with this

thank you all in advance for your responses.  I look forward to reading them. 

[David M.]

@Mordy Chaimovitz

Correct, mostly. The Due on Sale Clause allows the Note holder to call in the loan in the case of the transfer of the property. The Fannie Mae guidelines appeared to have changed recently in the case of transferring to a single member LLC. However, I really wouldn't do it since the mortage would be left behind in your name. Also, if you keep doing this it, in my layman's opinion it looks like you are using the lLC as your alter-ego, thus piercing your corporate veil

Also, correct... Legal entities such as LLC's are not eligible for conforming residential loans. If the LLC takes TItle, you need to obtain commercial, i.e. non-residential, financing.