death and real estate - Posted by kENNY

Real Estate Investing Real Estate Law
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Posted by Rick, the Probate Guy on April 01, 2007 at 17:36:17:

Kenny - The answer to your loan assummability question is answered within the Garn St. Germain Act. If you acquire the property through any one of the nine exemptions, then you’re ok.

I’ve included a summary of the act for your own peace of mind; #5 relates to your situation:
Garn St. Germain Act re: Loan Assumption

This whole issue was settled in the 1982 federal act called the Garn-St. Germain Depository Institutions Act. According to the Act there are only nine exceptions to a lender?s ability to enforce it?s due-on-sale clause and they are:

(d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon ?

(1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;

(2) the creation of a purchase money security interest for household appliances;

(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;

(4) the granting of a leasehold interest of three years or less not containing an option to purchase;

(5) a transfer to a relative resulting from the death of a borrower;

(6) a transfer where the spouse or children of the borrower become an owner of the property;

(7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;

(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or

(9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.

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death and real estate - Posted by kENNY

Posted by kENNY on April 01, 2007 at 07:03:28:

MY mother past way in jan 2006. I inherited 4 propertiers upon her death. 3 were rentals and one I curently live in. The three properties are rented but they have nortgages on them about 40k in all 3. I like to keep them. they have been transfered to me but the bank called last week to find out who was the beneficiary. I want to know do I have to get new loans on the properties. I’m going thru a divorce also. Don’t want her to get anything from me I live in dayton, oh. please asdvice what I can do

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Several Issues - Posted by Jimmy

Posted by Jimmy on April 01, 2007 at 08:03:27:

when you say the properties have been transferred to you, what, precisely, do you mean? were they probated, and he executor recorded the final order? were they in a trust, and trustee issued a trust deed? were they held as JTWROS and you own them now buy operation of filing a notice of death?

as for the loans. I’m not sure. not sure if death of the borrower will necessarilky cause the loan to be called. the loan docs should address the situation. read them. you may be able to step into these loans and move forward.

can’t comment on the divorce. Ohio is a separate property state, and all of my experience is in community prop states. rules are very different.

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Re: Several Issues - Posted by Kenny

Posted by Kenny on April 01, 2007 at 09:26:14:

Well Attornry has filed papers to trnsfer my name to the deeds on record with county. If I can’;t find atual mortgages on properties where could I go to get them without contacting bank?

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Re: Several Issues - Posted by kenneth bruce

Posted by kenneth bruce on April 14, 2007 at 22:04:43:

you might check with the mortgages company she might had a insurance to payoff any of her loans, if she died. some older person would might tought of that. so you would not have any worry.

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Title Co could tell you about mtgs - Posted by John Merchant

Posted by John Merchant on April 01, 2007 at 10:58:53:

Any local title co would happily sell you a Title Commitment that would detail just what mtgs and liens are on the property…also whether your spouse is also an inheritor/owner.

Like Jimmy nearly all my experience is in Comm. Prop states and I don’t recall the rules in Sep Prop states like yours.