What's Going On? Loans Being Called! - Posted by Stacy (AZ)

Re: Some more info! YIKES! - Posted by JohnBoy

Posted by JohnBoy on July 21, 2001 at 14:39:57:

Do you have any idea of how many properties are held in a trust? Can you imagine the expense it would be for lenders to just start searching every property and then go through the expense of trying to find out if the borrower is the beneficiary of the trust or not?

What everyone seems to be getting stuck on here is, what if the lenders “asks” who the beneficiary is without having to lie by saying yes or no as to whether the borrower is or not.

What everyone is missing here, in my “opinion” is, it’s NONE of their business, period! So when the lender asks if you are the beneficiary, or who the beneficiary is, or has the beneficiary interest been transfered…my answer would be…it’s None of your business! That information is PRIVATE! That is the purpose of deeding the property into a trust to begin with, to conceal the names of the owners from public resords!

If you tell the lender it’s none of their business, what can they do? They would have to take you to court and get a judge to order you to answer under oath. How much would that cost the lender to go through? Especially if they wanted to check every property being held in a trust?

By answering it’s none of their business you wouldn’t be lying to them about anything. Since it isn’t any of their business…you would be telling the truth!

Re: Some more info! YIKES! - Posted by Brad Crouch

Posted by Brad Crouch on July 21, 2001 at 14:35:20:

Taylor,

: The thought occurs to me…if things like this
: happen more often ie. sellers calling to check on
: loan status to see if its still in their name, it
: could cause mortgage companies to start examining
: transfers to trust and to dig deeper to find out who
: has beneficiary interest.

The trust agreement prohibits the trustee from disclosing the names of the beneficiary(s). So it would take a court order to get this information. If the trustee happens to be located out of state, it would be even MORE costly to learn the identity of the beneficiaries.

The process of “digging deeper” has its costs, and sometimes those costs can be substantial.

Brad

Re: What’s Going On? Loans Being Called! - Posted by Ronald * Starr

Posted by Ronald * Starr on July 23, 2001 at 13:40:46:

David Alexander-----

They scheduled the trustee’s auction. I deeded the property into a partnership name and put the partnership into bankruptcy. They cancelled the sale. I will talk to them about the possibility of being allowed to reinstate the loan. I don’t know what will happen.

Good InvestingRon Starr*

Re: What’s Going On? Loans Being Called! - Posted by Ronald * Starr

Posted by Ronald * Starr on July 23, 2001 at 11:07:45:

Stacy (AZ)--------------

No, I did not take in in a land trust. I did not expect a problem and did this before I started reading CREONLINE.COM .

This was a conventional loan, not VA, not FHA.

Good Investing****Ron Starr

Re: These institutions… - Posted by Bill Gatten

Posted by Bill Gatten on July 23, 2001 at 12:40:44:

I’ve had 2-3 people E-mail this AM, asking me to hop on the referenced threads…so for my humble input (which accompanied by a dollar and fifty cents will get your cup of Starbucks), see my answer to JIM above (below?)

Bill Gatten

-0-

Jim,

I can tell you that lenders DO call loans that are unprofitable, or which can be replaced with better terms, for various reasons. The one “excuse” they’re using is violation of the DOS. However, let me tell you this…if the property is in a land trust with the borrower as the only beneficiary and either the borrower or another entity as the trustee, there is no legal way for the lender (Countrywide or anyone else) to call the loan (Federal legislation). If, subsequently, the property is leased to you on a triple net basis, then after that you are made a co-beneficiary in the trust?the is no DOS violation and you have 100% of the benefits of ownership, plus the secrecy, anonymity, privacy and asset protection of the Co-Bene land trust…

The DOS issue is not one to be afraid of, unless you are flaunting it and your techniques in front of a lender (like wagging a taco in front of David Alexander?they?re on you like a duck on Hostess Ding Dong). The problem comes in when your seller or buyer think they are as knowledgeable about these issue as you are, and they refuses to “carry” based on what they (think they) know about the DOS.

Regarding Countrywide, my company currently holds title to some 4-500 properties with Countrywide loans on them (5-6 million $$ or so), and we correspond with them in some way on almost a daily basis (through PAC Management, not NARS)…they have no trouble with the property being in a land trust or having PAC Management making the payments for their borrower.

Re. Countrywide, however, I can tell you they are ruthless…they called a loan on me once right after I brought them current with a $36,000 cashier’s check. They accepted the check, processed it and told me the auction would take place as scheduled on the following Wednesday (3 years and several thousand dollars in legal expenses later, we won the suit and were allowed to continue making payments to them (same loan, same terms, same interest rate).

Again…do take a look at the PACTrust as a most viable option, given your trepidation about Countrywide.

Bill Gatten

Re: Some more info! YIKES! - Posted by Taylor

Posted by Taylor on July 22, 2001 at 24:21:36:

Brad,
You are totally right,however,my comment was based on the fact that the seller CALLED to check if the loan was still in his name.

I’m saying that for the seller to do that it would tip the lender off that a transfer has taken place…or why else would someone who is supposedly paying on his/her mortgage call and ask if its still in their name?? At this point the lender might ask if he is the beneficiary (ie. my so-called digging deeper) to which the seller might just disclose the sale of the property via a trust.

So then regardless of what the trustee is allowed to divulge concerning the trust, the cat would have been let out of the bag, so to speak, by the seller. The trustee in such a case could be dutifully doing his/her job by not offering any details of trust but those efforts would be undermined by the seller. For all intents and purposes the lender can now use the info. from the seller to call the loan due since he just disclosed that he is not the beneficiary.

Keep in mind that it all started with the seller calling on his loan. That was the tip off.
Taylor.

Re: Some more info! YIKES! - Posted by Brad Crouch

Posted by Brad Crouch on July 22, 2001 at 14:21:33:

Taylor,

If you’re saying that a stupid seller can screw up your deal this way, then I agree with you. You have the duty to inform the seller to keep his mouth shut. If he wants to make sure that payments are being made on HIS loan, he can call the lenders 800 number to verify these payments.

This is a case where no news is good news. If the seller recieves no dunning correspondence from the lender, then this means everything is O.K…

Anyway, you would have the seller sign a CYA letter, so that he knows that there might be a “remote” possibility of the lender finding out about a transfer.

Brad