2007-02-10 22:29:53 · 5 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
This is a US question. The answer is specific to US law and US practices.
Legally the title of the property can be transferred without the loan being paid off. The new owner would be taking title subject-to the lien. The loan would still be the responsibility of the person who signed for the loan.
There are due-on-sale clauses in modern loan agreements. It is legal to transfer the title and not even trigger the due-on-sale. That exemption was put into law for the protection of those doing estate planning. There are specific criteria. The exemption has been used by investors for a long time.
Note that a transfer that does trigger the due-on-sale clause does not mean the lender will call the loan due. Just that they have the right to do so. Some intentionally ignore the transfer if the payments are made on time after the transfer. Others will call the loan due. It is a civil matter and not a criminal matter so the lender can only collect on the loan. They can not invalidate the transfer. Their right to foreclosure is superior so if the loan is called due and it is not paid they will take the property back.
Depending on what you are trying to accomplish you might have no issued or you might have specific issues that you need to deal with. More info would have to be provided to make the answer any more specific at this time.
2007-02-11 00:07:57 · answer #1 · answered by Anonymous · 0⤊ 0⤋
No; but since your loan was granted on a condition of ownership, you need to contact the mortgage comapny and either have the new owner assume the loan or pay off your loan to avoid legal trouble, unless you are adding someone to the deed and not ending the loan holders interest.
2007-02-10 22:40:14 · answer #2 · answered by wizjp 7 · 0⤊ 0⤋
Most mortgages are not assumable these days, so yes it would probably have to be paid off. The other person could apply for a mortgage for the amount of the current note to pay off the current lender. Check the mortgage though because many older notes were assumable.
2007-02-10 23:02:59 · answer #3 · answered by G&L 3 · 0⤊ 0⤋
Most mortgages now have a "Due on Sale" clause, so the answer would be Yes.
2007-02-10 22:37:43 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 1⤋
They could go to the bank and assume the loan......
2007-02-10 22:54:46 · answer #5 · answered by a b 1 · 0⤊ 0⤋