Posted by John on November 14, 2005 at 21:11:09:
Refi or Sell
Due on sale - Posted by Kelly
Posted by Kelly on November 14, 2005 at 20:50:16:
O.k. guys, I REALLY need your help!! The lender on a property I took over “subject to” has called the loan due. I have the Land Trust agreement and other pertinent information. How would you advise me to proceed? I spoke to an attorney and he was useless in this manner.
Re: Due on sale - Posted by JohnBoy
Posted by JohnBoy on November 14, 2005 at 23:51:33:
What I would do is ignore the lender. I would keep making the payments. Lenders may call the loan due but it doesn’t mean they will always enforce it by proceeding to foreclose. So I would keep sending the payments on time and wait to see what they actually do. If they call the loan and you ignore them they will have to file suit to foreclose. Until that happens it’s just hype on their part.
What State are you in? How long does it take to go through the foreclosure process in your State?
In my State it takes a minimum of 9 months if you don’t contest it and let the foreclosure go through its normal course. If I contest it then it could take a couple of years. So if a lender called a loan AND they actually pursued it by filing foreclosure, then I have 9 - 24 months to deal with it. In 9 - 24 months I can do a lot of things before the lender could foreclose and get the property.
If I had a tenant/buyer in the property they could buy it long before the lender could get the property back. My tenant/buyer’s contract would be up before then. If they couldn’t buy the property then I could sell it and pay the lender off and walk away with any equity I had left. I could just refinance it when the time comes and pay the lender off. So I have lots of options before having to worry about the lender doing anything and even if they did I have 9 - 24 months to deal with it before they can complete the foreclosure process.