Sold "subject-to" and bank wants to foreclose

Real Estate Investing Apartments
1

I am in need of advice. About 18 months ago we sold an 8 unit apartment “subject-to”. There has never been a late payment or any problem, and now City National wants to foreclose. The problem is a $492,000 loan on a property worth $650,000. Suggestions as to a government entity we can appeal to, or?? Thanks

2

Need more info -

Presumably the lender is execising their option to accelerate based on a non-monetary default related to a un-approved transfer.

What specific claim is the lender making? How are they justifying their actions? What specific covenant or clause are they referencing as the breach of contract?

3

Don’t understand

That’s what I don’t understand. All the bank rep says is that we had no right to change the title. She did not even like that my husband and I put it in our own LLC - she wants that “undone”. The breach of contract is the change of title - though we are still liable on the loan. Now there is a follow up letter wanting an assortment of minor repairs done (security door repaired, etc) as well as all new carpet and vinyl i all units! I feel it is an absolute witch hunt.
I just sent letters to 3 top people at City National Bank…not sur what else to do.

4

You might want to consult with an attorney because it looks like you violated your mortgage contract.

Jeremy Cyrier, CCIM

5

Read your mortgage/deed of trust?

In the fast and loose REI market we’ve had the last several years people seem to have forgotten that their mortgage or deed of trust most likely gives the lender the option to foreclose if you haven’t first obtained its consent to sell or change the title in any way.

Find and read your mortgage or DOT and you can find this language that you already agreed to when you got your loan.

Have you read Bronchik’s “No Due on Sale Jai” ?

Do so and you’ll see that language that WB was referring to as its in most mortgages or DOTs.

While its true that lenders have been looking the other way for some time now they still have the right to enforce their written agreement.

So you’d probably better “play nice” with that bank unless you’re ready to lose your apts.

6

Clarity please…

…so are you saying that buying subject-to is a crap shoot?

7

[QUOTE=M Anthony;889714]…so are you saying that buying subject-to is a crap shoot?[/QUOTE]

Yes. You need to understand the loan terms if you want to buy subject to