Comments On Subject To Clause LAW Article
Hello. I have read the follow article and am now confused as to legalities of this method. Any comments for a different perspective are appreciated.
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your site didn't post. Taking over exisiting loans is not against the law. If you ask most professionals, agents, lawers ,ect the first thing out of there mouth is thats illegal. The majority of loans being paid by others are family estates. Living trusts ie the home and loan belong to mom she gets $700 a mo. from ss benifit The caregivers (her childeren) live in the home they pay the morgage they get the write off. There are many other examples including lease option ,in my opion even rent being paid to home owners that don't occupy with an occupancy loan could be called. All of these things go on every day. The bank holds its option to accelerate. They are not interested in calling performing loans. If they were they would demand notification of these changes. They know whats going on they can read it here. Why call a performing loan that was headed for forclosure. If it makes them nervous they could just sell it.
The site was the
investing in land web site which has a long article on due on sale clauses.
It does agree they are not CRIMINALLY illegal however their could be found to have CIVIL punishments. The ethics behind misleading a bank are also questionable...
Any comments from someone with LEGAL insight is appreciated
What would the civil penalties be? From what I have read there is no language in the loan docs that require disclosure so you are not in breach. There are no statutes that prohibit the pracitce so there is no recourse there. I was looking at my loan docs on Friday and it uses language to the affect that a bank could call the loan IF they find out the title has changed hands or if I am no longer occupying the home.
There are specific remedies that someone can seek in a civil case. The bank would have to prove damages. If the loan is still being paid on time what damages has the bank incurred? They might argue that they could get a higher rate BUT that is a slippery slope because they wouldn't be able to only call the loans when it is favorable to them. That might be construed as discrimination.
So if you could please let us know the name of the site where this article appears. BTW I am not an attorney I am only a paralegal so please don't take what I said above as gospel.
THis is one of my favorite articles that $cash$ has posted in the past.
http://www.legalwiz.com/articles/dueonsale.htm
This is by Bronchik "there is no due on sale jail"
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Quote:I ... am now confused as to legalities of this method [Subject To]. Any comments for a different perspective are appreciated.dwierman,
If you are confused (or concerned) about the legality of Subject To, just pull out your most recent HUD-1 statement.
Look at lines 203 and 503. Now ask yourself why the federal government would include specific items for "Loans Taken Subject To" on a government approved settlement statement if this were an illegal activity.
IS THERE A REVIEW DOCUMENT BY FERDERAL OR STATE LAW THAT COVERS THIS??
[ Edited by dwierman on Date 09/02/2003 ]
dwierman,
Glad to meet you.
Well I see Albatross (not sure how this it is spelled) has found a new site to get his dribble on, the last site he tried it on he was told to stop or face a lawsuit.
His reply on his own web site where he sells his own materials, was he could post on the their site if he wanted to, but I never saw him post there again. Guess he doesn't have much stock in his own opinion.
William Bronchick, Esq. a respected real estate attorney and investor has an article about the DOS clause which is referred to above. I personally know Bill and he is a stand up person and very knowledgeable attorney and investor.
When you take articles from somewhere else you may be violating copyright infringements, so I would recommend you get persmission from the author of this article before you post it anywhere. Or may you already have?
Various ways to make a name for yourself in this industry but negative posting and articles is not one of them.
Am I close on this one?
My advice to you personally is DO NOT due methods of investing that contain the DOS clause, so this should end it as far as you are concerned. For the rest of us we will continue to make money. Now we can get back to creative real estate investing in a postitive manner.
John $Cash$ Locke
Thanks John for your feedback.. There are so many people saying negative things about the DOSC... one has to be concerned about "what is the worse case scenario?"
I am all for CRE and subject to strategy investing to make money...
Its probably time I bought your course...
: )))