An Equity Holding Trust vs. Lease-Option(Part 2 of 3)
Last week we talked about how you could use an Equity Holding Trust to purchase a house. This week we will go a little bit deeper into how this transaction works.
An Equity Holding Trust is a title-holding device that allows for easy conveyance of ownership, and incidents of ownership (including tax write-off benefits). In the arrangement, a 3rd party trustee, whose actions in dealing with the property`s title are wholly at the direction of the beneficiaries, holds title to the property.
Upon one`s becoming a beneficiary, all or a portion of that beneficiary interest... can be sold, traded, transferred or hypothecated by means of a simple Assignment of Beneficiary interest.
In that the lender`s security interest is not impinged upon when a property is placed into such a revocable trust, Federal Law eliminates the need of involvement by, or permission being required of, the secured party in the underlying mortgage loan
(FDIRA, 12 U.S.C. 1701(d)-3).
Investors may utilize Consumer Mortgage Loan Advocate’s EHTrust™ in various ways. For example, anytime a seller is willing to remain on the existing financing (keep their names on the loan), the Consumer Mortgage Loan Advocate's EHTrust™ becomes an ideal vehicle for acquiring the property conveniently and anonymously.
That is, easily, quickly and without Public Notice (Recording), as well as without the potential for the triggering of a mortgage lender`s Due on Sale provision. The No. Amer. CMLAs EHCTrust™ tends, in-fact, to effectively protect the property against liens, suits creditor judgments and even IRS tax liens on behalf of either party.
Also avoided is the necessity for dangerous or marginally unethical Creative Financing schemes. Without the necessity of subterfuge or deceit with respect to a lender`s security interest in the property, the EHTrust ™ becomes an ideal acquisition vehicle..
The Consumer Mortgage Loan Advocate’s EHTrust™ may be seen an effective legal shield for virtually ANY creative financing objective. It can, in essence be tantamount to a Long Term Lease (i.e., a lease for more than 3 years); a Lease Option; a Lease Purchase, an All Inclusive Trust Deed, an Equity Share Arrangement, or a Land Contract (e.g., Contract for Sale, Contract for Deed, Contract for Warranty Deed, etc.).
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