Countrywide And Due On Sale Clause
Any fellow investors out there have any experience in taking properties Sub2 where Countrywide is the lender? If so, I am curious to know if they are cooperative if the loan is current and remains current or whether they attempt to excercise the Due On Sale Clause. Any input will be greatly appreciated.
Dave
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According to Bronchick, Countrywide enforces the DOS even if payments are current. I know of no other such lender.
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I agree with Arykatz, how will they find out? Put it in a land trust, name yourself as the trustee, the seller as the beneficiery and have him assign the benficial interest over to a LLC that you create. What do you think Ary? Alot of wiggling, but I would do it if the lender has a history of calling the note due.
Suntzu18
I have two homes with countrtwide and there has never been an issue. In fact when I called them to get their fax number and notify that we have been hired is property managers for the life of loan and of the change of address they were very helpful.
But I did do it the way that the previous post described.
LeaseoptionKing,
With all due respect, I disagree with your statement below about Bronchick, and with countrywide being a problem..............
Quote:
On 2004-12-05 10:56, LeaseOptionKing wrote:
According to Bronchick, Countrywide enforces the DOS even if payments are current. I know of no other such lender.
.............
In fact, when this all came to light initially, I researched this issue with great haste, as I hold several houses that I purchased sub2, w/ countrywide loans on them.
I of course used my methods, which does involve land trusts.
Anyway, bottom line, I've never had a loan called, and the only ones I found that had been called by CW, were one of two things happened:
1. Payments were not made.
2. Someone notified the lender, usually a seller who wanted off the loan, because they tried to get a new onw, and were told ONE OF THE REASONS they did not qualify, was because the old loan was still on their credit.
In fact, Bill and I, along with several others, had e-mail conversations with each other, and those who claimed loans were called.
Bill posted publicly on another forum he assertion that loans were not being called, due to anything other than I mentioned above, and there was no known proof CW was out researching titles.
Beleive me, I spent a ton of time making sure we are on solid ground, because I don't want to sell a bunch of houses, or refi from owner occupied low rates on high equity deals unless I have to.
And I don't, thank goodness.
Don't sweat WHO the lender is when buying sub2, unless it is an FDA or Farm subsidy loan, or a HELOC left open.
Anything else, when done right and performance is there, will be fine, as has been my experience and conclusion based on extensive research.
HTH,
Jim FL
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I thought that sounded a bit insane. All I know is Bronchick reported what he was being told by fellow investors (in his "No Due On Sale Jail" article). I am glad to hear that this is not actually the case.
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screw that company, i hate everything about them
I put every sub2 into a trust with the seller being the beneficiary and assigning the beneficial interest to my corporation. I notify the lenders that I will be managing the property and have all correspondence sent to my company address.
If we really take the time to think about this scenario, what lender would even consider having REO property versus a good performing loan? For that matter what lender would consider having REO property versus a not-so-good performing loan without first making concessions to cure default?
Having massive amounts of REO property in their portfolio reflects very badly on the company and it is something that the company's investors will not tolerate much of.
One of the things that I do in taking properties subject 2 (especially if the seller is months behind) is work with the lender to make one payment immediately and defer the other past due payments and fees to the rear of the loan.
I've had this offer accepted way more times that I have had it refused. The lenders will tell you themselves that they have no interest in owning real estate. Their business is to lend money and make a profit from it. Your home in the harshest sense is merely unwanted collateral.
I agree with the majority of responses above. Countrywide is not particularly out there looking for title transfers or people breaking the fine print. As long as the loan is current, I believe that there is no need to worry about Countrywide invoking the DOS clause.
I have a property that I bought thru countrywide with an owner occ loan. 1 month later, I moved out and began renting it. Countrywide didn't give me a single problem when I called to change the address and other information on the loan account.
Just my 2 cents.
JS.