Because most conventional banks dont consider a quitclaim deed into a trust as a transfer of title therefore it doesnt bring up any seasoning issues when you go to resell. Although most Goverment loans now do consider it as a transfer of title and it will have seasoning issues. I believe some Federal law has recently been passed that adversly affects landtrusts used in this type of way, im sure someone else can elaborate.
ok I understand, but the buyers lender will have issues, no? I spent 5 years wholesaling mortgages, and not one lender would accept a trust, or demanded that either the property be taken out of trust, or the trustees be revealed. How do you get around this?
Quote: There are NO seasoning issues with buyers lender if you record a deed with a transfer tax exemption.
FHA will not allow a purchase and sales contract to be written within 90 days of a title transfer of the subject property. They do not care about transfer tax.
There are many lenders that will question any deed that was recorded in the recent period whether it is a Warranaty Deed to Trustee, Quick Claim Deed, Warranty Deed, etc. Many times the lender does not have a hard and fast rule concerning chain of title (also called seasoning issues), it is up to their underwriting department to look at the situation and interprete.
Just reread the posts. They are weaving back and forth between the selling in a trust and buying in a trust. Which is it that we are talking about? Is the Buyer a trust, or the Seller a trust? These are two very different issues.
ICGPROPERTIES - you are telling me that you sold 25 properties last year, within 90 days of recording a new deed, to end buyers who originated mortgages and never got into chain of title issues? I would certainly like to hear from other investors on this issue because this is not my experience.
Here is the link to HUD News Release regarding FR-4615 HUD Flipping Guidelines.
interesting question, no one has experience in this?
uhh...how does it work, why it should/should not be used...educate me please.
Because most conventional banks dont consider a quitclaim deed into a trust as a transfer of title therefore it doesnt bring up any seasoning issues when you go to resell. Although most Goverment loans now do consider it as a transfer of title and it will have seasoning issues. I believe some Federal law has recently been passed that adversly affects landtrusts used in this type of way, im sure someone else can elaborate.
ok I understand, but the buyers lender will have issues, no? I spent 5 years wholesaling mortgages, and not one lender would accept a trust, or demanded that either the property be taken out of trust, or the trustees be revealed. How do you get around this?
right, but when you transfer out of trust, you expose the chain of title behind the trust, then you have seasoning issues. How do we get around this?
Quote: There are NO seasoning issues with buyers lender if you record a deed with a transfer tax exemption.
FHA will not allow a purchase and sales contract to be written within 90 days of a title transfer of the subject property. They do not care about transfer tax.
There are many lenders that will question any deed that was recorded in the recent period whether it is a Warranaty Deed to Trustee, Quick Claim Deed, Warranty Deed, etc. Many times the lender does not have a hard and fast rule concerning chain of title (also called seasoning issues), it is up to their underwriting department to look at the situation and interprete.
Just reread the posts. They are weaving back and forth between the selling in a trust and buying in a trust. Which is it that we are talking about? Is the Buyer a trust, or the Seller a trust? These are two very different issues.
ICGPROPERTIES - you are telling me that you sold 25 properties last year, within 90 days of recording a new deed, to end buyers who originated mortgages and never got into chain of title issues? I would certainly like to hear from other investors on this issue because this is not my experience.
Here is the link to HUD News Release regarding FR-4615 HUD Flipping Guidelines.
http://www.hud.gov/news/release.cfm?content=pr03-055.cfm
"Re-sales occurring 90 days or less following acquisition will not be eligible for a mortgage to be insured by FHA."
no, no, it was not me that claimed 25 flips last year...
[ Edited by jackbenimble on Date 04/14/2008 ]