Purchasing Property
What are the reasons that a lender might call in a loan if the property is purchased by an individual and that is then absorbed by an S corporation?
What are the reasons that a lender might call in a loan if the property is purchased by an individual and that is then absorbed by an S corporation?
Perhaps the property was funded at a special low rate as an owner-occupied home and the owner had a great credit score.
Perhaps that mortgage rate is not available as a commercial loan and the note is no longer marketable.
Perhaps there is a prepayment penalty that is now due to the mortgage company.
Perhaps....maybe you should ask them why they are calling the note.
[addsig]
Not paying the mortgage will usually do it.
They probably called it because of the Due on Sale Clause. When the individual transferred title to the corporation, they took this as a sale. You could have just placed the property in a land trust, then retained a 10% interest as an individual and deeded 90% to your corp. A land trust is legally protected under Federal law and the lender cannot invoke the DOSC.
Da Wiz
oh boy