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?

Comments(4)

  • bargain7618th February, 2006

    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]

  • BBagnall22nd February, 2006

    Not paying the mortgage will usually do it.

  • mtnwizard25th February, 2006

    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

  • BBagnall26th February, 2006

    oh boy

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