Witness, Gary I did read the Garn-St. Jermaine act. Ain’t Google wonderful?
(c)(1) In the case of a contract involving a real property loan which was made or assumed, including a transfer of the liened property subject to the real property loan, during the period beginning on the date a State adopted a constitutional provision or statute prohibiting the exercise of due-on-sale clauses, or the date on which the highest court of such State has rendered a decision (or if the highest court has not so decided, the date on which the next highest appellate court has rendered a decision resulting in a final judgment if such decision applies State-wide) prohibiting such exercise, and ending on the date of enactment of this section, the provisions of subsection (b) shall apply only in the case of a transfer which occurs on or after the expiration of 3 years after the date of enactment of this Act, except that–,
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or
This is the exclusion that all of the Trust people seem to quote. However it does say that the borrower must remain a beneficiary, so a trust for the purposes of transfer is in violation of the DOS. Yes I know, that if it is not recorded it does not trigger it. But my point is, if you use the trust and the seller decides it is a raw deal he can gripe about and apparently win in Michigan. That sets you up for a fraudulent transfer if you in turn sold it to someone else.
My question was, how does someone talk to a seller about the DOS without specifically telling them they might not want tell the Lender that they did indeed sell it. Don’t ask don’t tell I suppose. Another would be to tell them that there is no DOS jail as Bill Bronchick pointed out.
So why not just take it subto don’t worry about the DOS, don’t lie about it if asked, and be upstanding about your business affairs. I say let them know that the bank may call it due and that they can be considered to be required to tell about the transfer to the lender but inform them that it for the most part is never a worry if the payments are being made.
I was wondering what the specific language was one might use if put in that situation with a seller, without seeming to tell them not to do it.
For the record I am not worried about Subto and the DOS. Just the legalities of trying to hide it. And why hide it if what you are doing is honest and straight forward. It seems to me that is the essence of a trust, to “HIDE” as it were. If you were worried about your assets, put it into a couple of corporations, LLC’s, and trusts so that you have some protected venues. At least secure your own personal assets in a trust.