All Forum Posts by: Sean T.

@Arthur Ruiz

Yup.. agree with all of the above... The LLC has potentially greater problems because the loan is "left behind" with personal names... If you don't setup some sort of payment system, then how do youmake sure you aren't co-mingling since the loan should be paid by the people, not the LLC. Aside from single member LLC's being disregarded entities for tax purposes, I hope the LLC isn't taking interest deductions for payments it isn't making... In this arrangement, how isn't the LLC being used as an alter-ego... Don't forget to make sure the mortgage insurance clause is updated/correct...

Other than during the credit crash, I don't find people who really have had the Due on Sale clause called in if the payments are being made.  I am mostly sure the logic of "don't the bank want to call in a 3% loan and issue a 7% loan to make money" is not correct.  Usually the banks aren't the Note holders since the Notes have been sold off to the secondary market.  The "profits" are made on net interest margin, i.e. the difference between the loan interest and the interest/cost of money for funding or buying the loan.  So, calling the loan and reissuing doesn't make a huge profit increase, it actually just costs them more because of the extra transactions.

Lets face it...  what you hear on mass media and the internet is rarely true.  I don't know how we go from 20 years ago to be careful of what you hear on the "internet" to now anything "online/social media" is absolutely true... :(

The reason why the Due on Sale clause is typically not triggered is because the lender never finds out. How the lender ends up finding out is when the insurance policy is updated to reflect the new and correct owner of the property, the LLC.

So see if you can draw logically from there the issue. Most people do not have the actual owner of the property, the LLC, actually insured.

So when most of these people are trying to limit their liability by having an LLC own the property.....they have in fact created way way more liability for themselves by not being properly insured....and they also have an LLC that is easily pierced since the loan is in the individuals name, and not the LLC.

 in my mind that could happen with unrelated party transactions like the SUB TOO transactions that will become common place now. OR should I say much more prevalent than in the past few years.