Hi, I am a seller with a property that has low interest loans and looking to sell it with subject to, looking for a lawyer who has experience in Subject-To transactions that will protect my interest. Please contact me if you have experience. Location in Oakland, California. Thank you.
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
2y
@Zhe Xu this is not difficult to do if you are working with the right person who knows what they are doing. If you are the seller you just need to make sure you know the following:
1. Is the buyer qualified to make the payments.
2. Will you be using a neutral third party to receive the payments and send them to all the parties.
3. Are you comfortable with leaving the loan in your name for a period of time (negotiable.)
4. Are you willing to do seller financing for the difference or just wrap the other loans and get more money that way?
Hi, I am a seller with a property that has low interest loans and looking to sell it with subject to, looking for a lawyer who has experience in Subject-To transactions that will protect my interest. Please contact me if you have experience. Location in Oakland, California. Thank you.
its easier to do with lender approval if they are commercial properties. It's a violation of the due on sale clause if they are SFR's and less likely to get lender approval. An attorney can do a contract to protect you and the buyer's interests but they can't force a subject to transaction down a lender's throat.
Calling the note has always been a rare situation but, its becoming more frequent as interest rates are much higher and subject to transactions are more prevalent. I'm sure there is a way your attorney can structure it where you remain on title so as not to risk the due on sale covenant and everyone is happy.
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
2y
@Ron S. would you be able to point out any verified and documented incidents of the bank calling a loan due to "subject to" financing lately. I hear this all the time but have never seen it in the over 40 years that I have been in business.
Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
2y
I have personally accelerated loans in my portfolio. I mean, I'm not going to provide any non public information on our borrowers to you for verification but, I am attesting to you that I have personally accelerated loans for covenant default of the due on sale clause. In all cases, the borrowers either paid our loan off or, had themselves put back on title within the timeframe of my demand.
I've never actually had to go through a foreclosure for the due on sale default. There are many reasons lenders do care (Liability, insurance, loss payee/mortgagee, NPPI information, investor guidelines, FHLB pledged loans (That's a big one), etc.). Once i am able to explain why i care, i usually get compliance before having to send any demand letter from Legal.
I should clarify, I'm not bothered by nor am I accelerating loans where borrowers put their property into a trust or other legal entity for estate planning purposes. I am documenting that purpose when applicable. I'm only concerned with my borrower(s) being removed from title and a non obligor being put on title. They can add the janitor to title for all i care, as long as they don't remove themself.