The End of 'Subject To' ? - Posted by Trent

Posted by JPiper on December 13, 2000 at 13:53:30:

I think you missed his point. “Subject to” deals are often done by deeding to a trust as an initial step.

JPiper

The End of ‘Subject To’ ? - Posted by Trent

Posted by Trent on December 13, 2000 at 13:41:30:

Just wondering…since ‘Subject To’ using a trust appears to be the bullet proof 100% legal way around the due-on-sale clause, I’m wondering if the Feds will find a way to make this illegal. Since so many people are using trusts to buy property and assume the existing financing, I’m sure the day will come when they will end the loop hole to this. Thoughts??

Re: The End of ‘Subject To’ ? - Posted by JPiper

Posted by JPiper on December 13, 2000 at 13:51:12:

I wouldn’t spend a whole lot of time worrying about what to do IF Federal law (Garn St Germain Act) is ever amended to NOT exempt deeding to a trust. IF that is ever done, then I suspect we’ll have other ways to deal with the clause.

By the way, I wouldn’t categorize the “deeding to a trust” technique as 100% bulletproof. When the beneficial interest is assigned it DOES trigger the clause. And I would never ASSUME that lenders would not attempt to dig into the trust in some way, or simply accelerate the loan as a test of the viability of the trust as to whether the original borrower is still the beneficiary (where they had reason to believe that this was the not the case).

JPiper

Re: The End of ‘Subject To’ ? - Posted by Houserookie

Posted by Houserookie on December 13, 2000 at 13:47:22:

I would never write deal subject to "using a trust."
I would simply acquire properties under a trust.

Secondly, I think anything can happen someday. But today is not that day.

Third, most people DO NOT purchase properties under trusts. In fact, most people have no idea what trusts are.

The word trusts and Intel pentium chip seems to have the same kind of effect on people.

Houserookie