Posted by S.Autumn on June 14, 2001 at 10:06:49:
Jim thank you for responding. Here’s the deal; The house appraised in 2000 for 103,000 for the sale completed in May, 2000 for 80,000 which was what was owed on it at the time. That individual then fell behind starting December 2000, made some partial payments and is now facing a trustee sale in July…I want to look at all my options, cure the loan and taxes and complete my second successful deal as a new investor.
Sheila
PAC Trust Question - Posted by S.Autumn
Posted by S.Autumn on June 14, 2001 at 01:23:51:
Hello,
This pertains to the FNMA form 3260 Section 10. Uniform Secured Note. Does the PAC trust trigger this?
“Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property or any interest in it is sold or transferred(or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender’s prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of this Security Instrument.” (May 2000)
Just trying to cover all my own potential misunderstandings. The property is going to a trustee’s sale in Arizona in July and I’d like to help the owner as much as possible but want to proceed correctly.
Thanks,
Sheila
Re: PAC Trust Question - Posted by Brad Crouch
Posted by Brad Crouch on June 17, 2001 at 23:04:20:
Sheila,
: . . . (or if a beneficial interest in Borrower is
: sold or transferred and Borrower is not a natural
: person) . . .
I think this parenthetical phrase is what the drafters hope you won’t notice or know about. This would apply if the “borrower” was NOT a “natural person”. Like a corporation, LLC, Partnership or some other legal entity.
Then this means to me that if the borrower (person whose name is on the loan) is a “REAL person”, this would not apply.
Not a lawyer . . . just passing on something that was pointed out to me.
Brad
Re: PAC Trust Question - Posted by dewCO
Posted by dewCO on June 14, 2001 at 22:12:47:
I think Billmhas the answer correct. See more about the PACTrust at www.cal-equity.com Also, the PAC is a “Safer” way to take over properties which provides for more “insulation” from the potential pitfalls of the LO or straight subject to.
Re: PAC Trust Question - Posted by Billm
Posted by Billm on June 14, 2001 at 12:11:21:
“Does the PAC trust trigger this?
“Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property or any interest in it is sold or transferred(or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender’s prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of this Security Instrument.” (May 2000)”
See Garn-St Germaine. It specifically excludes enforcement of the due on sale when a borrower (Trustor) transfers title to an inter-vivos trust, where the Trustor retains A beneficial interest in the trust… Therefore, exercise of the due on sale provision is specifically prohibited under federal law when title is transferred as above.
Re: PAC Trust Question - Posted by Jim IL
Posted by Jim IL on June 14, 2001 at 02:24:04:
Sheila,
First, I cannot tell you anything about the PacTrust™, since I don’t use it, and have only read a little about it.
But, take a look at this quote you gave.
It says, “Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument.”
I have taken quite a few homes “Subject to” the existing loan, using a land trust, and frankly, it has been my experience, as well as others here, per the posts I’ve read that most lenders could care less, as long as the note is current.
Lenders generally do not want to foreclose, they want a performing loan.
There are no D.O.S. police either.
Perhaps a quick reading of Bronchicks articles here about the “Notorious” and Dreaded D.O.S. Clause is in order.
You can find it in the “How to articles” on this website and his.
Good luck,
Jim IL