How do you all deal with.... - Posted by Patch

Posted by JohnBoy on July 15, 2001 at 22:12:48:

You don’t deceive the bank. You hide it from the bank using land trusts. To deceive the bank you must you must do something to influence them to make a loan that they would not normally make. In this case you would not be influencing the bank to do anything. You are merely hiding a transaction pertaining to a property they happen to have a mortgage against without involving them in any way.

Deceiving the bank into doing something they normally wouldn’t approve a loan on in order to get them to approve the loan would be fraud. Hiding the fact you sold your property from them is not illegal. Violating the DOS in not illegal. It’s merely a breach of the mortgage agreement that gives the lender the “right” to call the loan at there “option”, not an obligation to call it due.

Deeding a property to a trust is not deceiving. It’s your right to do so. Federal law prohits a lender from calling the loan due when the owner deeds his property into a trust. If the lender checks title they would see the property was deeded to a trust. Nothing deceiving there. Assigning your beneficial interest of a trust is not illegal nor is it deceiving. It’s your right to do so. It’s also not required to record the assignment, but only have it notarized. This is not deceiving anyone. The purpose of a trust is to conceal the name(s) of the beneficiary. Just because the trust is private and does not reveal the name of the beneficiary it does not mean it’s deceiving. That is what using a trust is intended to do.

Now if the bank was to “ask” you to see the trust or if they were to ask you if you were the beneficiary of the trust and you answered “yes” when you in fact are not because you transfered your beneficial interest to someone else…then that would be lying to the bank and would be deceiving. Instead of lying to them by answering yes that you are the beneficiary when you no longer are…answer with, it’s none of your business! It isn’t any of there business since the purpose of the trust is to be kept private. The only way you would have to reveal anything pertaining to what is in the trust is through a court of law where the court orders you to answer any questions while under oath. Aside from being ordered by a court to reveal any information to the trust…it’s no ones business but yours, period!

Telling someone it’s none of there business is not deceiving. It’s the truth! Telling the truth isn’t deceiving. Lying would be.

How do you all deal with… - Posted by Patch

Posted by Patch on July 15, 2001 at 10:54:36:

How do you all deal with…

  1. Homes that the Home Ower’s Association states the
    the home cannot be rented or leased. Must be owner occupied…?

  2. Mortgages that state that the owner of the home must be occuping that residence…?

For example…When I purchased my home…the mortgage papers stated that I must be occupying that home…
Also, the Home’s Owners Assn. for this development has that rule that the home cannot be rented or leased…Must be owner occupied…

Thank You

Re: How do you all deal with… - Posted by JoeKaiser

Posted by JoeKaiser on July 15, 2001 at 14:53:56:

I have this very situation.

Board knew only “rental” or “owner occupied.” I said “it’s owned by a trust” and after requesting more info 3 or 4 times from me, they finally stopped asking.

Re: How do you all deal with… - Posted by phil fernandez

Posted by phil fernandez on July 15, 2001 at 11:11:13:

I only can answer the second one. When you applied for a mortgage to buy your personal residence there is paperwork that you have to sign that says you intend to use the house as your primary residence. You gave the bank a mortgage and got a corresponding interest rate based on that fact. If you signed all this with no intent to owner occupy, this would possibly be classified as bank fraud. You deceived the bank.

Taking it a step further. It usually doesn’t say how long you have to use the house as your primary residence. I would think a year would show your sincerity. After that, and the year that I mention is a very arbitrary number, there is no one saying that you can’t perhaps rent it out. Situations change and by no means does one have to live in this house for the entire 30 years of the mortgage.

Often I have bought a house as my primary residence and after a year have converted it into a rental leaving the low interest mortgage on the property and then buy another house to live in as my residence.

Re: How do you all deal with… - Posted by JohnBoy

Posted by JohnBoy on July 15, 2001 at 11:04:33:

  1. Sell on contract for deed or PACTrust. Owner will be occupying.

  2. Most mortgages say the borrower must occupy for 1 year. Not for as long as the mortgage is on the property.

Re: How do you all deal with… - Posted by Tarheel T

Posted by Tarheel T on July 16, 2001 at 24:35:15:


How do you convince your wife to make these moves assuming you are married?

My wife and I have just purchased a home down the street which we are fixing that would be ideal to move into except the wife only wants to make a move if we are buying a much better home than the one we live in.


Tracy Thompson

Re: How do you all deal with… - Posted by Wayne-NC

Posted by Wayne-NC on July 15, 2001 at 21:15:18:

Item #1 How do you deceive the bank on the due on sale clause. I know there has been much discussion on this but there can never be enough with all the differences of opinion.

Re: How do you all deal with… - Posted by phil fernandez

Posted by phil fernandez on July 16, 2001 at 05:07:03:

Hi Tracy,

I think it’s going to vary from couple to couple. Moving isn’t alot of fun. In fact it’s hard work and I don’t like to work. However what makes it all worth while is the accumulation of houses you can acquire, all with low interest owner occupied mortgages on them. When converting to rentals they surely cashflow much better with low interest mortgage payments. That in itself is enough incentive for me to keep moving.

Again it might not be for everyone. Try to convince your wife of the short and long term financial benefits of doing this.