Posted by Michael Morrongiello on March 28, 2004 at 13:49:58:
Your lender can’t tell you whether or not you can sell your house or not…You can elect to sell you home and finance the buyer, however your exiting loan that you are obligated on may contain the infamous DOS- due on sale clause. If that is the case then the lend “could” and stree could elect to call your loan and payable in full for violating their DOS clause provision in your loan.
However, if you have sufficient equity in what you owe in debt to this lender and what you intend to sell the home for and finance it for, you can also build a safety valve into the transaction.
If you were to sell to this buyer using some sort of a “wrap” type instrument such as a CFD - contract for deed, agreement for deed, bond for title,etc. and that agreement was never recorded of record, its quite possible that this lender will never find out about the sale.
If they do, and they get tough on the DOS clause issue, then you can elect to SELL the CFD instrument and convert it into a lump cash sum, from which you would then simply pay off the lenders loan.
Michael Morrongiello