In bill gettens book “No money down, no new loan” that you down load from this site, he talks about the advantages of his system using a land trust v/s other meathods of real estate investing. he goes on to say that a lease w/ purchase option is a violation of the lenders DOS clause. I don’t see how that could be…you’ve not conveyed ownership or title.
I bought my house using subject to land contract, which he says is also a violation of the DOS. Again, title was not conveyed to me until I refinanced the home in my name a year later, so I don’t believe that either. Further, as a broker, I do several deals a year that where land contracts and / or lease’s w/ purchase options…I’ve not yet had an underwriter mention anything about how “they where suprised the loan didn’t get called due” “b/c it’s a violation of the DOS.” maybe I misinterpreted what he said…
someone correct me if I’m wrong, but the basic jist of the DOS is re-conveyance of ownership. w/out that you’re not in violation of anything. If title is in my name as owner of record and my loan performs then it’s not a violation of the DOS.
Is anybody on here actually a member of Bills group NARS? Is he and his system legit or just another self proclaimed guru makeing a living of other ineptitude? If most gurus’ where really so great and knowledgeable they would probably be employing their tactics to make millions rather then selling bunk programs.
http://www.reiclub.com/articles/no-due-on-sale-jail
Great article on the DOSC. Read the last paragraph especially. Just because something could violate the DOSC doesn’t mean it will get called due.
Basically, I am, as you suggest a scam artist who knows very little to nothing about anything I teach across the U.S. or write about in my various books on the subject of land trusts. But, candidly, I decided a long time ago that if I was going to be a charletan and fraud, I would be the best I could be. My real area of interest and expertise is in Mespotamian Folklore and religions of the prediluvian world, as well as in Domestic Mulluskery (i.e., the care, feeding and show-training of pet clams see billgatten.com).
But be all that as it may, the issue alluded to in your question(?) is whether or not a lease option is in fact a DOSC violation or not: not whether a lender would excercise its right to call the loan if they see one. The answer is YES it is a DOSC violation. Period. Would a lender call for that reason? I don’t know…I’ve never known them to do so, but it would depend upon the circumstances I guess (with my transactions they couldn’t if they wanted to). But is it a violation non-the-less? Yes (See 12USC1701-j-3 re. any lease for more than 3 years or a lease relating to an option to purchase).
Is a CFD a due-on-sale violation? Yes. Will a lender call its note because of one. Yes…if they want to. Do they ever want to? Yes. Just check with Countrywide Funding, Washington Mutual or Nationwide Funding, just to name three that have tried to equate our program with a CFD and had to be taught that it wasn’t one, and that they had no grounds for foreclosure. With a CFD or L/O or LeasePurchase, it’s not the relinquishment of title that is at issue, it’s the conveyance of an equitable interest in the property (ownership of the lender’s security) that p…'es them off, and which generall requires hefty legal expense and judicial foreclsoure to ameliorate the siotuation and and dispossess the unauthorized resident-buyer.
Am I trying to sell somebody something here? Nope. No axes to grind: 'just answering your question.
And, by the way, if you are indeed a licensed broker, that’s carries with it lot of duty and responsiblity to you clients. I would sincerely recommend that you read up on on some of these issues, laws and regulations a bit more in detail before setting yourself up for a possible bad fall. Lease options are considered among the most litigious of all real estate transactions gone awry. I’m told that many of the major brokerages (Coldwell Banker for one) no longer allows L/Os by their agents. And I’m also told (not confirmed) that some of the ‘big-timers’ (a titled group of which I am not a member) have discontinued their lease option courses for this very reason (Ron Le Grand was one name given to me in this regard).
Bill Gatten
P.S., Thanks (fellow sky-diver) for down-loading my book for FREE, and for all the warm gratitude and kind words here on the site.
thanks for the response Bill! First of all, I’m obviously new at investing. You see dozones of programs out there that look great on the surface but wind up being junk. Everybody has a different opinion of what is good material and what is crap. ie…some say sheets has great info. and other says his program is garbage. I was just looking for constructive insight from people who have purchase your program and/or use your service b/c I’m placing consideration into it myself.
re: me being a broker…I do b-c loans all day long. I do not structure leases, L/O deals etc…
what I have is peopel that are in a L/O deal and they come to me to do the refi. So I see these deals all the time. I’ve not structured one myself though. as for my personal home, I rented it for a hear and then refied it into my name using x checks. Maybe the lender could have called it due…If they new about it…who knows. I do no that the former owner changed his homeowners for an ho3 to fire only. So his agent would have sent this change to the lender, so I’m sure they new about it. anyway that deal was only for 12 months, so maybe it didnt violate the DOS…
anyway, thanks for the follow up and the Schooling! I’m not trying to debate you on these issues, rather just trying to understand them better.